The World Bank is to provide India with USD 4.3billion in loans, including USD 2 billion to support its state-owned banks. The organization expects India's economic growth to slow to as little as 5.5 percent in 2009, down from almost 10 percent two years ago. "This is a crucial time to support India," said Roberto Zagha, the World Bank country director for India. The loans will mainly be used to fund infrastructure projects and support companies that need credit. "While the worst of the crisis seems to be behind us, doubts linger about the strength of the comeback, partly because the strength of the global recovery is uncertain," Zagha said. The loans came in response to Indian requests for more support to help it cope with the economic downturn.
The World Bank on approved a EUR1 billion loan for Hungary, part of an international emergency package announced last October to help the country weather the global financial crisis. The World Bank financing is part of a EUR19.8 billion package, which includes funds from the IMF and the European Commission. The 8.5-year loan is by the International Bank for Reconstruction and Development, the World Bank's institution that aims to reduce poverty in middle-income and creditworthy poorer countries by promoting sustainable development. The credit was extended to support fiscal reforms, a ‘financial stability program,' pension reforms ‘and aid in cost containment and deficit prevention in the health sector,' the Washington-based development lender said.
The World Bank approved a EUR200 million loan for Latvia's banking sector, which has been hard-hit by the global financial crisis and a deep economic contraction. The World Bank said the loan would help strengthen the banking system's solvency and liquidity, aid renegotiation of corporate and mortgage debt to avoid foreclosures, and improve consumer protection in the financial sector. Latvia pledged to swiftly implement a reform program ‘to facilitate sustainable recovery,' said World Bank Europe and Central Asia Sector Manager Sophie Sirtaine said in the statement. ‘Strengthening the banking sector will encourage resumption in lending to creative entrepreneurs, small business owners and other businesses. It will also mean that depositors' savings are protected.