BUDGET 2000
SPECIALS
INTERVIEWS
COMMENTARY
GOVT&ECONOMY
Y2K: BIZ FEATURES
INDIA & THE WTO
CREDIT POLICY
BIZ IN THE USA
CARS & MOBIKES
MANAGEMENT
CASE STUDY
BIZ-QUIZ
USEFUL INFO
ARCHIVES
NEWSLINKS
SEARCH REDIFF

Rising oil prices may hit growth rates in South Asia

World Bank president James D Wolfensohn has warned that the higher oil prices -- $ 7 a barrel higher than the baseline projection -- could reduce growth by 1.5 percentage points in South Asia, thereby having a disproportionate effect on the poor.

He said this at a meeting of the International Monetary and Financial Committee, or IMFC, of the International Monetary Fund, or IMF.

At the same meeting, Finance Minister Yashwant Sinha, who spoke before him, had projected a higher growth of over 7 per cent for India in 2000-2001.

Wolfensohn said many developing countries, especially those in East Asia that are just emerging from crisis, are vulnerable to demand shocks given the weak balance sheets in the banking and corporate sectors and after-effects of the crisis on the poor.

He, however, said the world economic environment, and with it the prospects for developing countries, were much improved as compared with just a year ago. "Not only have the risks of widespread financial crises receded, but developing countries were projected to grow at a fast pace because of more buoyant advanced country growth and subdued inflation," he said.

"In aggregate, developing countries' growth was projected to reach 4.6 per cent in 2000 and 4.8 per cent in 2001- almost the levels reached before onset of the crisis."

UNI

Business