World bank economist Mick Riordan explains why poorest countries are affected

The bank said that developing countries are facing their worst economic crisis for years.

In its report on global financial prospects the World Bank predicts that economic growth will be halved to less than 2% this year, with most of the rise in output will be concentrated in rich countries.

The World Bank has produced a gloomy forecast

And things will not be much better next year, with growth unlikely to pick up significantly.

Financial turmoil in Asia has hit growth around the world and brought the world to the brink of a perilous economic situation.

"There is still a substantial risk that the world economy will plunge into recession in 1999 rather than experiencing the sluggish growth," the bank added.

The World Bank says that the developing countries will be worst hit, with no fewer than 36 countries, and one quarter of the developing world's population, suffering from a fall in output.

Overall output in developing nations will be the lowest since the debt crisis of the early 1980s.

In east Asia, the five "crisis economies" - Indonesia, South Korea, Malaysia, Philippines and Thailand - are predicted to contract by 8% this year and to expand by just 0.1% in 1999.

Japan, according to the Bank, will experience 2.5% negative growth in 1998 before improving to "a modest output decline in 1999".

The World Bank has called for international financial systems to be strengthened to avert another crisis.

The bank also stepped up its attack on the International Monetary Fund's initial attempts to contain the Asian crisis which proved unsuccessful.