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Chief Economist says financial crisis has 'left a scar'

Alison Schafer's picture

The global financial crisis may be easing, but it is far from over, according to the World Bank’s chief economist.  The World Bank is holding its annual meetings in Istanbul, Turkey, and those meetings prompted an assessment of the global economy from Justin Lin.

Lin is the World Bank’s chief economist, and he says the situation may be improving, but the financial crisis of 2008-2009 “has left a scar”.  He warns that it will be years before developing economies bounce back.

 

 

Lin, meeting with other leading economists at the Council of Chief Economists Roundtable in Turkey, reminded them that the world needs to be ready for the challenge of fixing the damage left by the crisis.

For example, Lin says, the residue from the financial crisis will be apparent for years, with unemployment high and consumption low. He says that India will bounce back with an 8 percent growth rate, but the country was roaring along at 10 percent before the crisis. Ethiopia, he says, will come back at 7 to five percent, and but it was showing what he called “high” rates of growth of 11 percent before last fall.

Along with Justin Lin from the World Bank, the Council of Chief Economists Roundtable also featured statements from Eric Berglof from the European Bank for Reconstruction and Development, Stephan Cecchetti from the Bank for International Settlements, Ali Ifzali from the Islamic Development Bank, Louis Kasekende from the African Development Bank, and Jong-Wha Lee from the Asian Development Bank. The topic of discussion for the roundtable was "Scenarios for Global and Regional Economic Recovery and Growth."

 

Comments

The first meeting of the EAPB Chief Economists Network was hosted last week by the Bulgarian Development Bank (BDB) in Varna. As the initiator of the network I see the first meeting as a platform which will give us important insights of the countries in Europe and macro-economic environment in the European Union. An important part of the network is to learn from the experience to handle the crisis. Much of the meeting was focused around efforts to restore the balance of public finances of the debtor countries. Together with the EU Commission, we discussed the content of a possible reform of the Stability and Growth Pact in order to stabilize the situation in Europe and create a long-term growth. Chief economists and experts of EAPB Member Banks from Sweden, Bulgaria, Denmark, Germany, Hungary, Latvia, the Netherlands, and also of banks of Italy and Macedonia took part in the meeting and elucidated the current economic situation in their respective countries. Most experts supported the notion of a slight recovery of the European Economy due to a gain in confidence, a return to the job market. We also found that the public banks and funding agencies play a vital role in promoting and enhancing the local economy in crisis. Lena Bäcker Chief Economist Kommuninvest i Sverige The Swedish Local Government Debt Office and member of the EAPB Chief Economists Network

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