World Bank, IMF See Slowing Global Economic Growth In 2005

Global economic growth is expected to cool slightly in 2005 after the strongest pace of expansion in four years last year, the World Bank said April 6, while the IMF warned high oil prices were stopping growth. The World Bank's annual Global Development Finance 2005 report showed overall economic growth of 3.8% in 2004, while projecting a slowdown to 3.1% in 2005.

Separately, the International Monetary Fund warned that high oil prices were increasingly a "downside risk" to the global economy, and forecast they would trim at least 0.25 to 0.50 percentage points off growth this year.

The World Bank noted that developing countries outgrew high-income countries in 2004, and gains were widespread. "But global growth momentum has peaked, and developing country gains are vulnerable to risks associated with adjustments to ballooning global imbalances -- especially the U.S. $666 billion current account deficit," the report said.

The strong global performance in 2004 was underpinned by solid U.S growth, 4.4% and rapid expansion in China, India and Russia. Developing nations grew at an average 6.6% pace, supported by a surge in financial flows not seen since the financial crises of the late 1990s.

Copyright Agence France-Presse, 2005

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