Removal of Stimulus Packages Next Year Poses Bubble, Credit Risks Says World Bank’s Zoellick

The global economy must be wary of bubble and credit risks in 2010 as central banks around the world begin removing stimulus, warned World Bank President Robert Zoellick yesterday (Wednesday).

Speaking to the press at the Singapore Foreign Correspondents Association, Zoellick said policymakers must be vigilant in preventing asset bubbles and that the private sector is needed to stoke demand.

"And so when that stimulus money has run its course, then the question will be, will the private sector rebuild demand?" he said.

Part of the problem going forward for East Asian economies is policymakers typically follow the U.S. Federal Reserve. However, nations choosing to do this may face challenges because the recovery won’t be symmetrical.