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The World Bank's chief economist projected the economic growth rates of the U.S., Europe and Japan to stand at zero or below.
Speaking at a seminar at the Korea Development Institute, Justin Yifu Lin attributed his forecast to the recent credit crisis, the burst of the real estate bubble as well as shrinking consumption and investment.
He added that the financial crisis in advanced countries will in turn spill over to developing countries, resulting in sharp decreases in exports, rises in raw material prices, a shortage of investment capital, and their own economic crises.
He advised industrial upgrades for developing countries and "new international architecture" such as the Group of 20 to tackle the ongoing credit crumble.
Arirang News
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