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World Bank sees 3pc global contraction

WASHINGTON, Jun 11 – The World Bank said on Thursday the global economy is set to shrink roughly 3.0 percent this year, a figure worse than previously estimated as the credit crisis hammers economies.

"Even with the stabilization of financial markets in many developed economies, unemployment and underutilization of capacity continue to rise, putting downward pressure on the global economy," World Bank president Robert Zoellick said in a statement.

The latest growth estimate marked a significant revision to the bank\’s prior estimate of a 1.75 percent contraction in late March.

The growth update came ahead of a two-day meeting of Group of Eight (G8) finance chiefs that opens Friday in Lecce, Italy.

Zoellick called for stepped-up aid to poor countries that are continuing to be battered by the global economic and financial crisis.

"Although growth is expected to revive during the course of 2010, the pace of the recovery is uncertain and the poor in many developing countries will continue to be buffeted by the aftershocks," he said.

"There is much more we need to do in the coming months to mobilize resources to ensure that the poor do not pay for a crisis that is not of their making."

Zoellick urged G8 meetings this month and in July to "follow up on the promises made at the Group of 20 meeting in London in April to restore domestic lending and the international flow of capital," the statement said.

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