Large-scale unemployment is expected to continue in some of the world's developed countries and would endanger the economic rebound, World Bank President Robert Zoellick said here Friday.
The World Bank chief's comment came days after Washington announced the unemployment rate hit 10.2 percent in the United States last month, the double-digit level not seen since April 1983. Economists say the jobless number could still rise.
High unemployment is likely to cause second-wave effects" to financial institutions as problems will continue in consumer loans, credit card loans and mortgages and sometimes commercial properties, Zoellick said at the Asia-Pacific Economic Cooperation (APEC)Leaders' Week CEO summit.
Zoellick said while Asia is recovering fast from the worst recession in decades the conditions in the U.S. and Europe remain difficult.
He said rising unemployment will also prompt political leaders to raise barriers and take up
protectionism measures to defuse political pressures."Protectionism is another major risk. By and large now it is a low-rate fever, it is not yet afull-blown influenza, but if you have large-scale unemployment, political leaders might beunder pressure to do something," Zoellick said.
The World Bank chief also highlighted three other aspects of risks to the global recovery
-- the hand-over of demand from public to private sectors, the new source of growth as U.S.
consumers can on longer be the engine, and inflationary pressures and asset bubble concernsin fast recovering East Asian economies.