Fed: Rudd gives warning on economy
01 Apr 2009 12:36 AM
LONDON, March 31 AAP - Prime Minister Kevin Rudd says the economy could turn out to be a lot worse than forecasts released on Tuesday.
The OECD's interim economic outlook expects output in its 30 member economies to contract by 4.3 per cent in 2009.
Mr Rudd told an Australian Business lunch in London the forecasts are "a wake up call" for the G20 summit this Thursday.
Mr Rudd said the figures presented major risks.
"But the fact is the figures are on the downside - and the economy could turn out to be substantially worse than these forecasts," Mr Rudd said.
"The first major risk to global recovery over the next year comes from the potential economic collapse in emerging markets and developing countries."
Mr Rudd warned that a prolonged economic crisis could lead to political instability and social unrest in some developing countries.
"Projections and modelling aside, devastating impacts are already emerging," Mr Rudd said.
"According to the World Bank, an extra 53 million people will be trapped in poverty this year alone as a result of the crisis."
It also estimated infant mortality will increase by between 200,000 and 400,000 children per year from 2009 if the current crisis persists.
"Dealing with these risks and the evolving nature of the crisis will require the G20 to continue to adapt its work program," Mr Rudd said.
