HYDERABAD, India, May 4 (UPI) -- The Asian Development Bank has said rising oil prices on the global market may affect the economic growth of poor countries.
"The unsustainably high prices of crude oil in the international market could slow down the growth of economies of India and other developing countries," ADB President Haruhiko Kuroda said.
Addressing the 39th annual meeting of the ADB, Kuroda reflected on the negative fallout of soaring oil prices on developing economies.
"Oil-producing nations must make efforts to bring down oil prices to sustainable levels. At present, they are unsustainably high," he said.
International oil prices are currently above $70 a barrel, a price that upsets the growth calculations of many developing countries.
Kuroda said India has a projected gross domestic product GDP growth of 7.2 percent forecast for 2006, compared with 7.4 percent in 2005. Even the lower growth projection was based on the assumption that global oil prices would settle down at reasonable levels, Kuroda said.
"In the event, the high oil prices could slow down India's high growth without hazarding a guess by how much," he said.
The ADB has said it will double its loan assistance to India, to $2.65 billion.
"The focus areas of fresh funding will be transportation, water, urban development and energy management," Kuroda said. "ADB is proud of its commitments in India and hopeful of further strengthening cooperation. The funding will be more than double."
