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IMF expects Asian economy to slow down slightly
(Xinhua)
Updated: 2005-09-21 22:01

The economic expansion in large parts of Asia will slow down slightly this year due to higher oil prices and the IT sector correction, the International Monetary Fund (IMF) said Wednesday.

Growth in China and India, however, are expected to remain relatively robust, the IMF said.

In its latest World Economic Outlook (WEO) report released before the 2005 annual meeting of the World Bank and the IMF, the IMF forecast that the economic growth in Asia will be 7.8 percent this year compared with 8.2 percent last year, and it will slow further to 7.2 percent in 2006.

Regional inflation picked up in 2004 but generally remains well contained at present, the report said.

It said the persistently high oil prices will adversely affect economic activity in the region, especially as a number of countries have yet to pass through the full effect of past increases to domestic prices.

IMF also said that the region has a particularly large stake in an orderly reduction of global imbalances and the avoidance of a pickup in protectionist pressure. The regional current account surplus is projected to decline modestly from 4.1 percent of GDP to 3.7 percent in 2005.

"The key challenge facing the region remains to achieve appropriately balanced, twin-engined, growth consistent with an orderly reduction in external surpluses over the medium term," the report said.



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