IMF warns against consequences of rise in goods

Washington, Apr 14 (UNI) The governing body of the 185-nation International Monetary Fund (IMF) has warned against the consequences of 'sharp rise' in food and energy prices for the poorest people in developing countries and called for an international response to deal with the situation.

After a day-long meeting, it urged the Fund to work closely with the World Bank and other partners in an integrated response through policy advice and financial support.

Oil has touched a record 112 dollar a barrel, and the price of rice has nearly doubled in just three months.

Earlier, IMF Chief Dominique Strauss-Kahn warned on Saturday that if food prices remain high, there would be dire consequences for people in many developing countries, especially in Africa.

''Hundreds of thousands of people will be starving, leading to disruption of the economic environment,'' he said yesterday.

He said the problem could also create trade imbalances that would affect major advanced economies, ''so it is not only a humanitarian question.'' Development gains made in the past five or 10 years could be 'totally destroyed,' he said, warning that social unrest could even lead to war.

US Treasury Secretary Henry Paulson on Saturday, Paulson said the first six months of 2008 will be difficult for the US economy, which may have already entered its first recession since 2001.

He called upon IMF members to sharpen its focus on currency exchange rates and to more closely monitor financial markets.

IMF economists expect the world economy to slow to under four per cent growth in 2008, its slowest performance in five years.

Finance Minister P Chidambaram is leading India's delegation to the two-day World Bank annual meeting which began on Saturday.

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