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The World Bank releases its predictions for 2011

Flags of the European Union countries are hoisted in front of the European Parliament in the French eastern city of Strasbourg.

TEXT OF INTERVIEW

STEVE CHIOTAKIS: The World Bank is making its predictions for the new year. In a new report today, it says unemployment will stay high in economies hit hardest by the global recession. And rising food prices could also be a major problem.

Marketplace's Stephen Beard is with us live from London with the latest. Hi Stephen.

STEPHEN BEARD: Hello Steve.

CHIOTAKIS: Why is this World Bank report so gloomy?

BEARD: Because the bank is saying that while the emerging economies will grow strongly this year, they won't grow strongly enough to lift some of the hardest hit countries like the U.S. and much of Europe out of their malaise. As you say, unemployment will continue high in the West says the bank, and other problems like high household debt and fragile banks will continue to dog western economies. We should say though Steve, that not all economists are this gloomy. Ian Campbell of the BreakingViews Financial website says, we're all much better off now, than we would've been without the currently low interest rates in the U.S. and Europe.

IAN CAMPBELL: I would say that the ultra-loose monetary policy that we had in the U.S. that we had in the U.S. and which we still have in the U.S. and loose monetary policies also in Europe have actually precipitated quite a substantial global recovery.

CHIOTAKIS: Alright so Stephen, what about food prices going forward?

BEARD: Yes, the World Bank says this is a worry. It notes that a sharp rise in food costs triggered riots in a number of poor countries in 2008, and it says there are strong similarities between then and now. But on a slightly more optimistic note, the bank says grain stocks are much higher now than in 2008.

CHIOTAKIS: Marketplaces Stephen Beard reporting from London. Stephen, thank you.

BEARD: OK Steve.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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