G-24 Chairman Jean-Claude Masangu Mulongo speaks at a news conference during the spring IMF-World Bank meeting at the International Monetary Fund headquarters building in Washington April 11, 2008. (Xinhua/Reuters Photo) Photo Gallery>>>

    WASHINGTON, Oct. 10 (Xinhua) -- A group of developing countries warned here Friday that the ongoing global financial crisis could dampen growth prospects in the developing world.

    "Many emerging markets and developing economies are not immune to the spillovers of the ongoing global crisis, with some countries more affected than others," said the group of 24 countries (G-24) from Latin America, Asia and Africa in a communique following their meeting.

    They expressed concern about financial contagion spreading to several emerging market economies in the form of reversals in capital inflows, increased funding costs, and shifts in investor sentiment unrelated to fundamentals.

    In the communique, the G-24 noted that the world economy is facing its most difficult situation in years, against the backdrop of a deepening financial crisis that originated in mature markets.

    "Advanced economies are slowing markedly and some are already in recession," it said, adding "continued strained financial conditions will dampen global growth prospects."

    It called for a comprehensive international response to address the strains in financial markets and restore market confidence.

    In order to help reduce developing countries' vulnerability to crisis, including from contagion, the G-24 saw the need to move expeditiously to put in place new instruments to help prevent or deal with crises.

    "The introduction of a liquidity facility is long overdue," it noted, calling on the International Monetary Fund (IMF) to establish a new liquidity instrument well before the 2009 spring, based on work outlined by the IMF and further proposals by member countries.

    Meanwhile, the G-24 underlined the need for the international community to assist the poorest developing countries to cope with these shocks through stepped-up assistance.

    "Joint multilateral efforts and active policy coordination will be crucial to deal with these crises and avoid a protracted deterioration in financial and economic conditions in the world economy," the group stressed.

    The G-24 was established in 1971 to coordinate the positions of developing countries on international monetary and development finance issues and to ensure that their interests were adequately represented in negotiations on international monetary matters.

    They met Friday before the annual meetings of the IMF and its sister institution World Bank.