World Bank projects South Asia growth at 6.6 per cent
Washington: The South Asian region is expected to continue with its balanced growth, with India's GDP growth maintaining a healthy 6.9 per cent rate, the World Bank has said.

South Asia's GDP is estimated to have grown a robust 6.6 percent in 2004, according to World Bank's annual Global Development Finance 2005 report. "While this is down from the 7.8 percent growth posted in 2003, the deceleration mainly reflects a poor crop in India," says Shanta Devarajan, the World Bank's Chief Economist for the South Asia Region.

"India's growth rate this year is lower than last year but still a healthy 6.9 per cent. Outside India, regional growth increased from 5.7 per cent in 2003 to 5.9 per cent in 2004. The more balanced growth that characterised the region in 2004 is expected to continue with domestic consumption and investment providing the largest contributions to growth."

The report also says global economic growth reached 3.8 per cent in 2004-the fastest rate in four years, with developing countries outgrowing high-income countries. The gains were widespread - all developing regions grew faster in 2004 than their average over the last decade.

But global growth momentum has peaked, and developing country gains are vulnerable to risks associated with adjustments to ballooning global imbalances-especially the $666 billion U.S. current account deficit, it says.
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Greenspan warns about risks posed by mortgage giants
New York: The Federal Reserve Board Chairman Alan Greenspan has warned lawmakers that curbs should be used to regulate mortgage giants Fannie Mae and Freddie Mac, two agencies, which control the lion's share of American mortgages. The Chairman has said that they could pose a threat to the entire financial system if they face serious problems, Greenspan said.

Fannie Mae and Freddie Mac have combined mortgage portfolios of some $1.5 trillion, leading to concerns that a failure of either one could shake financial markets worldwide.

Federal Reserve Chairman Alan Greenspan urged Congress to curb the rapid growth of Fannie Mae and Freddie Mac, saying it was vital to cut the risks posed by the two agencies.
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