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World Bank chief predicts tough first half of 2009

The global economy is likely to worsen in the first half of next year with rising unemployment adding to the woes of governments, World Bank President Robert Zoellick said on Thursday.

He said an upturn in 2009 would depend on how governments cooperated among themselves to implement monetary and fiscal policy and whether they refrained from protectionism.

“I'm afraid that in the first six months of 2009, there are going to be problems worldwide, including in Asia,” he said when asked about the outlook for the world economy.

He also said China's leaders, whom he met while on a visit to the country earlier in the week, had “been struck by the depth and fallout in exports.”

But China, armed with its huge foreign exchange reserves and government surpluses, was well positioned to cope with the crisis, he added.

Zoellick said the financial and economic problems that emerged this year could turn into an employment crisis in 2009, and pledged that the World Bank would make funds available to help poorer countries cope with the economic downturn.

He was in Singapore to sign an agreement for the city-state to help the World Bank train people in urban development. (Reuters)