Zoellick says more developing countries need help

By Lesley Wroughton

WASHINGTON (Reuters) - In recent weeks, more developing countries are turning to the World Bank to help ease the effects of the global credit squeeze, World Bank President Robert Zoellick said on Tuesday, a sign that a larger number of countries are now being hit by the financial crisis.

Zoellick said the World Bank is now estimating that global trade, the lifeblood of economies, will drop next year for the first time since 1982 due to the global credit strains.

"It is our estimate that trade could actually fall, not grow more slowly or have growth fall, but actually fall next year, for the first time since 1982," Zoellick said in an interview with Reuters ahead of a meeting of world leaders.

"What we are seeing is that the falloff is not just due to slip in demand, although that will happen, but our rough estimate is that some 80 percent of the decline is due to problems of credit," he added.

He pointed at the Baltic Dry Index, a good gauge for supply and demand for basic shipping materials, has fallen some 90 percent to 92 percent since the summer.

"These are striking decreases," Zoellick said.

Emerging market economies have come under pressure in recent months as investors unwind funding positions amid worries about a global recession. The problem for many of them is they cannot quickly access the credit they need because banks are hoarding money and refuse to lend to each other.

The bleaker outlook for growth in the developing world is reflected in the World Bank's sharp cut in its growth forecast for developing countries to 4.6 percent for next year, from 6.4 percent projected in June.