Global economy in 'danger zone': World Bank chief
03 Sep 2011
The global economy is on the brink of a "new danger zone'' due to massive debt, slow growth and weak investor confidence, warned World Bank President Robert Zoellick on Saturday.
"The world economy is entering a new danger zone this autumn," he said. "The financial crisis in Europe has become a sovereign debt crisis, with serious implications for the monetary union, banks and competitiveness of some countries."
Robert Zoellick said in Beijing that record-high food prices and volatility in commodity markets are also putting the world's most vulnerable people at risk.
Zoellick agreed that the US needs to rein in its debt, spending and reform the tax system to boost private sector growth.
"But we are living in a global economy. Decisions in Europe, decisions in the United States, decisions in China - they affect all of us," the World Bank chief said.
Focusing on China, where he is currently leading a World Bank study to discuss possible reforms the nation needs to implement to improve its economic growth model, Zoellick was optimistic.
China's growth has been a source of strength in the crisis, but he said ''the growth model is unsustainable.''
