Oil prices, tsunami put brakes on South Asia growth

Higher oil prices, the Indian Ocean tsunamis and patchy rains are expected to slow South Asia’s economic growth rate in 2005 to 6.5 percent from 7.1 percent logged in the past two years, the IMF said. Higher oil prices, the Indian Ocean tsunamis and patchy rains are expected to slow South Asia’s economic growth rate in 2005 to 6.5 percent from 7.1 percent logged in the past two years, the IMF said. India, South Asia’s biggest economy, will see growth fall to 6.8 percent this year, a still robust number but down from 7.3 percent in 2004, the International Monetary Fund said in its twice yearly World Economic Outlook.

Although India’s growth wIL slow modestly, the economy was expected to remain robust with the impact of uneven monsoons and higher oil prices offset by buoyant industrial activity and strong investment.

The damage to India from the December 26 tsunamis was believed to have shaved 0.25 percentage pointS off its Gross Domestic Product (GDP) while Sri Lanka and the Maldives, two smaller South Asian island states, were harder hit.

India reported 16,389 people killed while Sri Lanka’s losses were nearly double at 30,957 dead and nearly a million homeless. The Maldives suffered s