The World Bank's chief economist on Thursday forecast that world economic growth would slow in 2007 but said the possibility of a crisis would diminish if the global economy could weather the next few weeks.
Francois Bourguignon, senior vice president at the multilateral lender, said the deceleration in world economic growth this year should not have a deep impact on developing nations, where the bank focuses its development lending. "We expect some slowdown in world economic growth this year," he said, adding that this would likely trim between 0.3 and 0.4 percentage points from growth in developing nations.
"Last year, developing economies grew by 6.5 percent, so this year we are looking at just over 6 percent," he told Reuters during a visit to West Africa to discuss the World Bank's ongoing strategic policy review.
"Growth is still likely to be strong next year," he said. Asked about the recent turmoil in financial markets, stirred by fallout from high-risk US subprime mortgage lending, Bourguignon played down the likelihood of a severe impact on the world economy.
"If there must be a crisis, it will be in 2007. If we can get through the next couple of weeks, then that risk will fall," he said. "If there is a crisis, it is more likely to be a temporary crisis." Bourguignon said the scandal surrounding the departure of Paul Wolfowitz from the World Bank's presidency had done no permanent damage to the institution. He said new chief Robert Zoellick was conducting business as usual.
Wolfowitz left under a cloud in June in a scandal involving a promotion for his companion, Shaha Riza, who also worked at the bank. The vice president said that Africa, which he characterised as the lender's priority region, may be under-represented in terms of its shares in the bank. "Africa has a weight which is inferior to its demographic weight, and probably even its economic weight," he said.
Comments
Comments are closed.