World Bank economist warns high interest rates will likely last longer

WASHINGTON (Reuters) – World Bank chief economist Indermit Gill on Wednesday said past experience showed that interest rates may stop going up, but they are unlikely to come down “anytime soon,” which could have severe negative consequences for developing countries.

Gill said steep debt servicing costs, high debt burdens and slowing growth in many countries raised concerns about a new debt crisis and the risk of contagion when countries default, but said he does not view the risk as “imminent.”

He told reporters that inflation developments looked promising in advanced economies, but supply shocks – especially in commodities markets – could raise inflation again quickly, which would put pressure on central banks to keep rates high.

(Reporting by Andrea Shalal)