|
: Francois Bourguigon took over as chief economist, World Bank, in October 2003. A doctorate in economics from the University of Western Ontario, his focus areas include poverty, income distribution and inequality, economic growth and development. On his second visit to India in the last 16 months, he spoke to Gunjan Pradhan and P Vaidyanathan Iyer about global economic growth prospects in 2005 and the factors that could dampen it in the current year. Excerpts:
India has witnessed a change in government since you last came...
India has been doing well in terms of growth in the past few years. We are also expecting it to perform well on the poverty reduction front. But we are waiting till better data is available. Estimates on poverty reduction are being made and a quick survey is being done. Everybody hopes that growth will continue as India has emerged as a part of converging countries i.e., the set of countries that are growing at a faster pace than the rest of the world. As a result, the gap between the developed and the developing is narrowing fast.
Do you expect the global economy to sustain the robust growth of 5% in 2004?
The global economy has done extremely well in 2004. It has been the best year in the past 30 years. One of the reasons is the good economic performance of the US, China, India and some of the Latin American and East Asian countries. At the end of the year, however, there was a high rise in oil prices. So, it might be possible that the growth rate of 2004 may not persist in 2005. But we are still not pessimistic. There will be a slowdown and the global economy may grow at 4% as against 5% in 2004.
Besides the spike in global crude oil prices, what can dampen growth in the current year?
The world economy faces some big risks, not so much from rising oil prices, but due to the exchange rate between the euro and dollar. There will be imbalances in the global economy due to deficits in the US economy. The concern would be greater if Asian economies, with huge dollar reserves, revaluate and shift to the yen or euro. But we don’t know what will be the benefit of this strategy. If a higher rate of interest prevails in the US, it will prevent capital flows and such a strategy would,thus,...
| Single Page Format | 1 - 2 - 3 - Next |
Discuss this story on expressindia forums
|
|
 |
 |
 |
About Us | Contact Us | Advertisers | Site Map | Make us your homepage | Work for Us | RSS | Subscribe | Electronic Edition | Privacy Policy© 2010: The Indian Express Limited. All rights reserved throughout the world
