Threat of further hike in global oil prices, FM offers advice
Hyderabad, May 5, (UNI) Warning that a further increase in global oil prices could not be ruled out, Union Finance Minister P Chidambaram today called upon Asian economies to be "watchful," pursue sound macro-economic policies and continue structural reforms to maintain the growth momentum and weather shocks.
In an address to the Board of Governors of ADB here, Mr Chidambaram said a further increase in global crude prices could lead to a widening of international payments imbalances with the accompanying risks of sharp adjustments in exchange and interest rates.
''Looking into the future, you must recognise that the risks to global and regional economic expansion have not lessened,'' Mr Chidambaram, who is also Chairman of the Board of Governors of ADB and Governor for India, said.
The session of the Board of Governors was opened this morning by Prime Minister Manmohan Singh, who reiterated India's commitment to deepen and widen relations with Asian countries.
Mr Chidambaram's address followed that of Dr Manmohan Singh, and the session ended with the speech by ADB President Haruhiku Kuroda.
Mr Chidambaram said notwithstanding the risks, the region's overall economic expansion will grow in a robust manner in the foreseeable future.
''Within the context of a strong global economy, continued recovery in the global electronic markets and fast growth in some of our member countries, such as China and India, developing Asia is projected to expand by 7.2 per cent by 2006 and 7 per cent in 2007, he added.
The Finance Minister found it heartening that Asia was experiencing an unprecedented position of influence in the global economy and said the countries of the region must capitalise on this new opportunity.
The most formidable challenge, however, being faced by the Asia-Pacific Region, Mr Chidambaram, said was of reducing poverty and improving on the social indicators.
Apart from this, the Asian community faces the daunting challenge of provision of quality infrastructure, he said.
UNI GS/AP PV BD1546