World Bank Says Global Economy Will Shrink in ’09 * S

WASHINGTON — In one of the bleakest assessments yet, economists at the World Bank predicted on Sunday that the global economy and the volume of global trade would both shrink this year for the first time since World War II.

The World Bank said in a new report that the crisis that began with junk mortgages in the United States was causing havoc for poorer countries that had nothing to do with the original problem.

As a result, it said, nations in Latin America, Africa and East Asia have had not only their growth stifled but their access to credit as well.

The bank’s assessment for 2009 was grimmer than those of most private forecasters. It did not provide a specific estimate, but bank officials said its economists would be publishing one in the next several weeks.

Even extremely pessimistic forecasters have predicted that the global economy would eke out a tiny expansion, on continuing if slowed growth outside the United States and Europe. In late January, the International Monetary Fund reduced its estimate for global growth this year to just 0.5 percent, the lowest level in more than 60 years.

In its new report, prepared for a meeting next week of finance ministers from the 20 industrialized and large developing countries, the World Bank warned that the financial disruptions are all but certain to overwhelm the ability of institutions like it and the International Monetary Fund to provide a buffer.

Robert B. Zoellick, president of the World Bank, pleaded for wealthy governments to create a “vulnerability fund” and to set aside a fraction of what they spend on stimulating their own economies to help others.

“This global crisis needs a global solution and preventing an economic catastrophe in developing countries is important for global efforts to overcome this crisis,” Mr. Zoellick said in a statement. “We need investments in safety nets, infrastructure, and small and medium-size companies to create jobs and to avoid social and political unrest.”

The bank said that developing countries, many of which had been growing rapidly in recent years, were being devastated by plunging exports, falling commodity prices, declining foreign investment and vanishing credit.

The impact of the global slowdown varies widely among countries, and the drop in prices for oil and other commodities has created both winners and losers. But the emerging-market countries face a combined financing shortfall of at least $270 billion and as much as $700 billion over the next year or two, the bank said.

Central European countries like Poland, Hungary and the Czech Republic are hurting from diminished exports to western Europe. They are also reeling from a severe credit crisis among major European banks, which have taken huge losses on American mortgages and mortgage-backed securities.

East Asian countries are experiencing plunging global trade. Demand for cheap manufactured goods has declined in the United States. That slump has hit many Asian countries both directly and indirectly.

Under the “vulnerability fund” proposal, when rich countries set stimulus financing for their own countries, they would set aside an additional 0.7 percent to help stabilize poorer countries.

Mr. Zoellick said the new fund could then make the money available to countries through the World Bank, the United Nations or other international financial institutions like the I.M.F.

He said the World Bank could triple its own lending in 2009 to $35 billion, though that would still be a small fraction of the shortfall facing poor countries.