World Bank chief urges US to break fiscal impasse

World Bank President Jim Yong Kim on Saturday urged U.S. policymakers to end the ongoing fiscal deadlock in a timely manner to avoid negative spillovers on the global economy. "We are now five days away from a very dangerous moment. I urge U.S. policymakers to quickly come to a resolution before they reach the debt ceiling deadline," Kim said Saturday at a press conference after the meeting of Development Committee of the World Bank and the International Monetary Fund (IMF). U.S. Treasury Secretary Jacob Lew has told Congress that the federal government will reach its debt ceiling of 16.7 trillion U.S. dollars by Oct. 17 and that failure to raise it would lead to a catastrophic default. "The closer we get to the deadline, the greater the impact will be for the developing world. Inaction could result in interest rates rising, confidence falling, and growth slowing," Kim told reporters. "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 U.S. policymakers to avert this potential crisis," he added. "Latest signs of recovery among developed economies, encouraging as they are, remain uneven, and the growth of some emerging economies is slowing. Addressing increased volatility and achieving strong, balanced, and sustainable global growth, will continue to require appropriate policy responses and reforms in countries of all income levels," noted a Saturday communique from the committee.