IMF Prepares for Annual Meeting

Rodrigo de Rato said increasing demand was driving oil prices up, creating "a very tight market."

Speaking in advance of the annual IMF meeting this weekend, he said the IMF used $77 a barrel in its forecasts for the global economy and would raise it to $78 a barrel in 2008 "with chances those numbers can go up, not down."

De Rato said another factor in the rising price of oil was geopolitical concerns, such as the Turkish parliament's vote Wednesday to authorize cross-border military attacks in northern Iraq against Kurdish separatists.

He said rapidly rising oil prices could create inflation problems for governments, particularly in countries with fast-growing economies.

Oil prices retreated from a record $89 a barrel on Wednesday after U.S. government data showed larger-than-expected gas and oil supplies outweighed worries about tension in northern Iraq.

De Rato also said sovereign wealth funds, large pools of capital controlled by governments, should provide more information to the public about their investment strategies.

"Transparency is key for sovereign funds," he said. "We have been monitoring them for some time, and we are already asking them to apply international guidelines on transparency."

Countries such as China, Saudi Arabia and Kuwait have such funds and are expected to discuss their operations with finance ministers and central bank governors attending the Group of Seven meeting Friday.

At the IMF's sister institution, the World Bank, which is also holding its annual meeting this weekend, new President Robert Zoellick said he wants private sector development at the center of the bank's effort to combat poverty.

"This is one of our strategic directions, that is how do we make sure we draw on the private sector," he said.

Since taking over at the helm of the 185-nation organization July 1, Zoellick, a former U.S. deputy secretary of state and trade representative, said he has "calmed the waters" ruffled by his predecessor Paul Wolfowitz.

Wolfowitz, a former U.S. deputy defense secretary, resigned in May in an ethics scandal. During his tenure, he was often at odds with member governments and the bank's staff.

In a speech last week, Zoellick said the bank's main priorities will be fighting poverty, helping countries emerging from war, providing financial advice for middle income countries and promoting regional change to combat disease and climate change.

At a news conference, he said he hoped his first annual meeting produces a mandate for his agenda that is specific enough for action but general enough to allow for feedback and modifications.

Zoellick said the bank, for the first time, is considering taking money from private sector companies for the bank division that lends to poor countries to supplement donations from governments.

"We've had some discussions with those companies, but we have to work through this with our board," he said, adding that he does not anticipate any problems.