Finance ministers from Asia and Europe predicted another bumper year of global economic growth, despite persistently high oil prices.
At talks involving 25 European and 13 Asian countries yesterday, the Europeans also urged China to allow its currency exchange rate to rise in the name of fairer competition in world trade, but they were careful to not be seen to be bullying.
The ministers predicted a 4.5 per cent expansion of global economic output this year, their Vienna meeting host, Austrian finance minister Karl-Heinz Grasser, told a news conference.
That compared to 4.3 per cent growth in 2005, which was the best in decades and driven to a significant extent by rapidly developing economies such as China and India, where growth is three or four times faster than in industrialised countries.
"We are more optimistic, even if the oil price has increased further. We are happy because we are more resilient," European economic and monetary affairs commissioner Joaquin Almunia said.
Meeting chairman Mr Grasser said in a statement that global growth had been strong so far this year but that risks remained - volatile oil prices, other imbalances, protectionism and a bird flu pandemic that has not so far materialised.
Asia and the US continued to be the engines of global growth, the statement said.
"EU countries and Japan, while growing more slowly, also showed signs of domestic demand picking up and improving sentiment, which should feed through to more robust activity," the statement added.
Asian Development Bank chief Haruhiko Kuroda, who attended the talks, said growth in the Asian region outside Japan would hit 7.6 per cent this year.
But he also warned that a sharp rise in global interest rates, a potential bird flu pandemic and high oil prices could disrupt strong economic growth in emerging Asian countries.
"If they were adjusted upwards in a sudden and sharp manner, it would be quite disruptive to the sustained expansion of emerging east Asia," Mr Kuroda said.
"The threat of human avian flu remains serious - globally and within Asia, outbreaks remain a concern," he added.
"Any largescale pandemic could be very costly... need to contain avian flu."
Bird flu has killed 109 people since 2003 in nine countries and territories, predominantly in Asia.
Vietnam and Indonesia have had the highest number of cases, accounting for 65 of the total deaths.
- (Reuters)
