US debt crisis: World Bank urges US policymakers to reach debt ceiling deal before deadline

World Bank’s President Jim Yong Kim has warned that the US is just “days away from a very dangerous moment” because of the government’s borrowing crisis.

Jim Yong Kim urged US policymakers to reach a deal to raise the government’s debt ceiling before Thursday’s deadline.

The US Treasury will start to run short of funds if no agreement is reached for it to borrow on financial markets.

Jim Yong Kim warned this could be a “disastrous event” for the world.

“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,” he said speaking at the World Bank’s annual meeting in Washington.

“If this comes to pass it could be a disastrous event for the developing world and that will in turn greatly hurt the developed economies as well,” Jim Yong Kim added.