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Brexit vote has hurt poorest countries, says World Bank chief

Published 03/08/2016

Jim Yong Kim has spoken of the negative economic impact of Britain's vote to leave the EU
Jim Yong Kim has spoken of the negative economic impact of Britain's vote to leave the EU

Britain's vote to leave the European Union has had a negative impact on the world economy, the president of the World Bank has said.

Jim Yong Kim said the Brexit vote has hurt the world's poorest states, as uncertainty in the markets makes it more difficult for developing countries to access capital.

The World Bank president said Brexit had combined with other negative factors - such as the slowdown in emerging markets - to dash expectations of an upturn in global growth.

Mr Kim told BBC Radio 4's World At One: "At the G20 finance ministers' meeting last month, we were hoping that for the first time in my four years as president of the World Bank group we would be able to increase our expectations for growth and adjust upwards what we thought would happen.

"But then Brexit happened and the IMF (International Monetary Fund) lowered its expectations for growth. We haven't come out with our numbers yet but we're also expecting that they will be lower.

"The things that you might expect have been happening - growth in the US, there is beginning to be some growth in the eurozone and in Europe, which we felt was very encouraging. Japan even seemed to be doing better. But Brexit really did have a negative impact."

He explained how the UK's vote has impacted on the developing world: "There is just so much uncertainty. For us at the World Bank Group, this uncertainty translates into tough times for the developing world.

"Any time that there is this kind of uncertainty, you see a flight of capital to safety and that's usually away from the developing countries, so access to capital is much more difficult."

Asked whether the prospect might become brighter as the UK develops new trading relationships to replace the EU membership it is giving up, Mr Kim said: "Our hope is that the path forward becomes clear as quickly as possible. Everyone hopes that the outlook will be brighter soon.

"But Brexit unfortunately is just one factor among many that are affecting the global economy. If you put Brexit on top of these other trends that have had such a difficult impact on developing countries, we are looking at slow growth and prospects that are not nearly as bright as they were even only a few months ago."

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