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East Asian economies likely to remain robust

(Xinhua)
Updated: 2007-11-15 16:30

New highs for oil prices will test the solidity of the East Asian and global economic expansions in 2008, the report cautioned.

Crude oil prices moved to well above 90 dollars in early November, underpinned by demand and supply factors. The report calculates that an average oil price of 90 dollars in 2008 would be associated with an income loss in East Asia of a little over 1 percent of gross domestic product.

"The impact of the US subprime crisis and the renewed surge in oil prices, have clearly increased downside risks," Milan Brahmbhatt, the report's lead author, said in a press release.

"Nevertheless we expect that the stronger growth momentum in the region to carry through 2008," Brahmbhatt added.

The poverty headcount rate at the 2 dollar-a-day level is estimated to have fallen to about 27 percent, down from 29.5 percent in 2006 and 69 percent in 1990.

But poverty has now become an overwhelmingly rural problem. The widening gap between rural and urban incomes in many countries is one of the main reasons for increasing inequality at the national level.

Governments in the region are therefore pursuing policies aimed at addressing the widening urban-rural income divide by renewing their focus on rural and agricultural development policies, while exploring ways to strengthen the development of human capital, the report said.

Related Stories: China's 2007 GDP to grow 11.3% - World Bank

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