The World Bank expressed concern about the thinning flow of private capital into developing countries, which has fallen nearly by half this year — 49 percent — to US$363 billion, compared with US$707 billion last year, after a record US$1.2 trillion in 2007.
The development lender also projected a 9.7 percent decline in global trade volume this year, before a 3.8 percent growth rebound next year.
“The need to restructure the banking system, combined with emerging limits to expansionary policies in high-income countries, will prevent a global rebound from gaining traction,” World Bank chief economist Justin Lin (林毅夫) said in a statement.
The anti-poverty bank called for “special attention” to “the risk of balance-of-payments crises and corporate debt restructurings in many countries” to “avoid another debt crisis as seen in the 1970s and 1980s.”
That was particularly the case in hard-hit developing countries in Europe and Central Asia, where GDP was projected to fall 4.7 percent this year, before a slight recovery to 1.6 percent growth next year.
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