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Washington (pte039/03.04.2003/15:18) - Assessing the economic influence of the war in Iraq, the World Bank http://www.worldbank.org has been forced once again to revise its prognosis for world economic growth in 2003.
The estimate has been revised from 3.6 per cent growth (July) to 2.5 per cent (December) and now to only 2.3 per cent. According to the Wall Street Journal, World Bank manager Philip Suttle has said the war in Iraq will cost the economy one half per cent growth.
Suttle said the war was slowing an already bleak economic recovery, the effects of which are reflected in poor trust, fluctuating markets and oil prices, which are expected to remain steady for the next three months and then drop sharply. While it may be difficult to assess the exact effect of the war, Suttle believes it will lead directly to a half per cent drop in growth - similar to the effect of the September 11 terrorist attacks.
Experts say the effects of war will be different in industrial and developing countries. While the economy of poorer countries is expected to grow by up to four per cent, the economy in industrial countries will only increase by 1.8 per cent.
The World Bank attributes the growth in developing countries to the increased transfer of money from immigrant workers to their home countries. Such transfers have increased from 48bn dollars in 1995 to 80bn dollars last year. (newsfox-special Iraq)
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