January 10, 2002	Thursday	Shawwal 25, 1422

TOKYO, Jan 9: Solid growth in developing countries will help the global economy expand in 2002 despite a worldwide slump aggravated by the September 11 terrorist attacks, a senior official from the International Monetary Fund said on Wednesday.

“Our projections for world growth of 2.4 percentage points is in fact higher than our projection for growth in all the major industrial countries,” said Charles Adams, assistant director of the Fund’s regional office for Asia and the Pacific.

“Essentially the world growth number is being kept up by a somewhat more rapid growth in the developing rather than the advanced parts of the world,” he told a news conference in Tokyo.

The IMF weights the growth of individual countries according to their share in world gross domestic product (GDP) based on purchasing power parity exchange rates.

“That tends to give a large weight to developing countries, particularly to countries like China,” said Adams, explaining a revised version of the IMF’s semi-annual World Economic Outlook report written in the wake of the terrorist blitz in New York and Washington.

While GDP in the United States — the world’s largest economy — is projected to slow to 0.7 per cent in 2002 from 1.0 per cent last year, growth in developing countries was seen up 0.4 per cent to 4.4 per cent.

Difficulties experienced in a number of Latin American economies, particularly Argentina, dampened growth prospects for developing nations in the western hemisphere seen at 1.7 per cent in 2002 from 1.0 per cent in 2001.

But sustained domestic demand in the face of a global slump, which has hurt export-reliant nations like Japan, helped developing Asia to maintain a steady growth projection of 5.6 per cent for 2002 and 2001, down from 6.8 per cent two years ago at the height of the technology boom.

“(The weaker growth pace) for developing Asia as a whole... is not actually a very large slowdown,” said Adams.

“Growth for China in particular, and a lesser extent India, has actually held out quite well and that is keeping up the numbers for developing Asia,” he said, adding the pair account for about two thirds of developing Asia’s GDP.

China’s economy is seen growing 6.8 per cent in 2002, down from 7.3 per cent last calendar year, while India’s GDP is forecast up 0.8 per cent to 5.2 per cent.

The terrorist attacks, superimposed on an global economy already left reeling after the technology bubble burst in 2000, pushed overall recovery prospects back six months to the middle of this year, the IMF report said.

But fourth quarter GDP was seen gathering momentum in the US and other member countries of the Group of Seven richest nations.

“The fourth-on-fourth numbers give you more of a flavour of the notion that we are projecting, subject to some risk, of a pick up during the course of this year. And that pick up will become evident next year when we produce numbers for 2003,” said Adams.

“There are several indicators from recent data from the US, from the euro area and from parts of Asia which I think do point to the possibility that we are starting to see things bottoming out.”—AFP