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Friday April 08, 08:15
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U.S. economic problems worsen outlooks for Asia’s developing economies
(by Brigitta Zulfitzler)
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The optimistic growing process of developing economies is threatened by continued high U.S. budget and trade deficits which cause rise of interest rates and weakening of the dollar, the World Bank said in Wednesday’s report on the global economic outlook.
The average economic growth in China, Russia, India and other developing economies already seems to drop from 6.6 % in 2004 to 5.2 % next year. The impact of U.S. deficits could be just an additional burden for them, the bank have forecast.
The U.S. deficit in trade and investment income made US$665.9 billion last year, an all-time high, while the budget deficit surged to a record US$412 billion.
However, the report pictured some positive tendencies of developing economies referring to lowered trade barriers, reasonable spendings and steady foreign debt levels. Their total foreign reserves increased by 30 % last year to US$1.6 trillion, the report showed.
Meanwhile, the Asian Development Bank said that Asia’s developing economies will keep on growing as strong domestic demand, regional trade and a steady inflow of investment are to compensate surging oil prices and raising interest rates .
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