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Last Updated: Friday, 5 May 2006, 12:03 GMT 13:03 UK
Oil prices 'threaten Asian boom'
Petrol pump in Tokyo
Higher petrol prices could dampen Asian GDP
Escalating oil prices could cut economic growth across Asia by at least 0.6%, the Asian Development Bank has warned.

The bank's chief economist, Ifzal Ali, said the region's booming economy was threatened by the cost of crude.

If the price continued to rise rapidly over the period of a year, China's GDP would fall by about 1%, India's by 1.1% and Thailand's by 1.8%, he said.

Mr Ali was speaking at the ADB's annual meeting in Hyderabad, southern India.

At the opening of the conference, Indian Prime Minister Manmohan Singh said all major international financial institutions had a responsibility to devise "credible strategies to enable the world economy to cope with the increased unpredictability and volatility of energy prices".

He added: "The challenge before Asia today is to create and maintain a regional and international environment that is conducive to maintenance of high economic growth."

Backlash feared

After slipping earlier in the week, by Friday the price of oil was heading back towards the all-time high of $75.35 a barrel seen in late April.

India, which imports 70% of its oil, has been badly hit by rising oil prices, but has been unable to increase prices because of pressure from countries such as China.

It also fears a negative consumer backlash ahead of elections in five states - leaving state-owned oil firms to subsidise petrol, diesel and kerosene.

Mr Ali told the AFP news agency that if price rises of the size currently being experienced were sustained over a year, GDP would be hit.

Government subsidies to keep down the price of petrol and other oil products were not sustainable in the long term, he added.

More than 3,000 delegates are attending the conference, which focuses on challenges facing Asian development.

Thousands of protesters have marched through Hyderabad, accusing the ADB of supporting poorly-designed projects that have displaced thousands of people.

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