- POSTED: 13 Oct 2013 06:38
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World Bank chief Jim Yong Kim warned on Saturday that the United States was headed toward peril as politicians failed again to resolve a standoff over the budget and debt ceiling.
WASHINGTON, United States: World Bank chief Jim Yong Kim warned on Saturday that the United States was headed toward peril as politicians failed again to resolve a standoff over the budget and debt ceiling.
"We are now five days away from a very dangerous moment," Kim said at the close of the annual World Bank-International Monetary Fund (IMF) meetings in Washington.
The US and world economies face higher interest rates, falling confidence and slower growth if the US Congress does not raise the US$16.7 trillion borrowing cap, Kim said.
The US Treasury has said that it would run out of adequate cash to pay all the country's bills as early as October 17 without a debt cap increase.
That has sparked worries that Washington could default on its debt, something that would rock the world's financial markets.
"The closer we get to the deadline, the greater the impact will be for the developing world," Kim said.
"If this comes to pass, it could be a disastrous event for the developing world, and that in turn will greatly hurt the developed economies as well."
"I urge US policy makers to avert this crisis," Kim said.
Finance officials from around the world expressed deep worries during the IMF-World Bank meetings this week over the partial government shutdown that has now gone on for 12 days, and the failure to raise the debt ceiling.