The International Monetary Fund said it expects stronger growth in the Caribbean this year and next. The projections were contained in the IMF's twice-yearly World Economic Outlook. The IMF is forecasting real growth in the Caribbean of 3.6% in 2005, rising to 4.8% percent next year. Last year's Caribbean economies grew 2.1%. The IMF credited likely recovery in tourism from the losses caused by last year's hurricanes. It said. "The key policy challenge in most countries is to strengthen budgets and to ensure public debt sustainability." Caribbean nations are among the most highly indebted in the world. The IMF said the world economy will continue growing despite high oil prices. The IMF's Economic Counsellor Raghuram Rajan cautioned however that costlier oil remains a clear and present danger, not least to developing countries. "Oil Increases" He indicated that they have to make hard decisions. Mr Rajan said: "Countries should pass through oil increases to citizens instead of subsidising them, so that citizens make the right consumption choices." The IMF said economies in Latin America as a whole are showing generally solid growth and are more resilient than in the past. It said that while the United States and China continued to lead the economic expansion a tentative recovery in Europe had faltered. The IMF report also includes a warning about international trade and financial imbalances, notably the deficit in US trade with the rest of the world. Reprinted from bbccaribbean.com