Development Bank sees harder year for members

Press, 15 April 1978, Page 19

Development Bank sees harder year for members

NZPA-Reuter Manila; The Asian Development) Bank says that world economic prospects for 1978 were less promising than in the past two years, and forecasts more problems for developing countries unless industrialised nations i achieved better growth rates,' 'and reduced trade restraints. The A.D.B.’s annual report showed that the performance in 1977 of most of the “developing nations” which are members was generally satisfactory, but Bangladesh, Laos, Cambodia, and Vietnam, suffered falls in agricultural production, because of weather problems. World food grain output | was at a high level in 1977,1

for the third year running, and the global food situation improved considerably, helping to dampen inflation. But the production of food grains in crop year 1978 was expected to be below last year’s, because of unfavourable weather. The. report was issued in advance of the 43-member bank’s annual meeting in Vienna from April 24 to 26. It said that while the world economy continued its recovery in 1977, the pace was modest, and over-all growth in the . gross national product — the sum of goods and services produced in a country — was substantially lower than in 1976. World trade volume in-

creased by only 5 per cent compared" with 11 per cent in 1976, and many countries encountered difficulties in reducing high rates of inflation, and unemployment.

Investment levels were generally depressed, and major trading countries suffered serious payments imbalances, leading to unstable exchange rates, the report said. The bank has increased its lending rate for loans from its ordinary capital resources from 7.65 per cent per annum to 7.70 per cent per annum, applicable as from April 1. The decision does not affect the terms applicable to loans made from the bank’s special funds, which will continue to carry only a service charge of 1 per cent per annum, with repayment over 40 years, including a 10-year grace period.