Growth trend for developing countries threatened: UN report

United Nations, July 11 (UNI) Developing countries, including the poorest 50, are on track in 2006 to continue the impressive 6 per cent growth rate of the past two years, but are threatened by volatility in commodity prices and interest rates, according to a new UN report.

''Primary commodity exporting countries should be vigilant about the risk of a sharp reversal in prices,'' according to the UN World Economic Situation and Prospects, released yesterday at the current session of the UN Economic and Social Council (ECOSOC) in Geneva.

Copies of the report were also released at UN headquarters in New York.

The report predicts that the 50 least developed countries (LDCS) will reach an unprecedented overall growth rate of over 7 per cent this year, as compared with 2.7 per cent for the industrialised world.

Burgeoning economic expansion in some large developing economies, particularly China, has continued to push demand for primary commodities along with non-economic factors such as geopolitical uncertainty and market speculation.

But such factors, the report warns, are highly volatile, and could be made more so by such possibilities as a sudden and sharp devaluation of an already weakened dollar due to high US debt.

Given such threats and in order to protect and consolidate the broad-based world economic growth of the last few years, the report says that greater international cooperation is required, particularly to redress the global imbalances while avoiding recessionary adjustment in the US.

''Coordinated global adjustment will require measures that will stimulate savings in the deficit countries and domestic demand in the surplus countries,'' report said.

UNI XC DKS ND1928