IMF Chief: High Oil Prices to Continue

Oil prices that have hovered around record highs for weeks are likely to continue to be high for another two years because of rising demand and supply constraints, the head of the International Monetary Fund (search) said Saturday.

But IMF Managing Director Rodrigo de Rato (search) said prices may not stay as high as the current level of $56.

De Rato made the comments during a three-day visit to India (search), where he met top Indian officials in New Delhi and Bombay.

"We have to be aware that probably oil prices will stay high, although probably not at these levels, in the next two years at least because of demand pressures and because of certain supply constraints," he told reporters.

De Rato described India's economy as "robust" and predicted a 7.5 percent to 8 percent economic growth in fiscal 2005, but called for the country to open its economy.

He also recommended India reform labor and tax laws and allow the private sector to develop the country's poor infrastructure. Although it has been easing protectionist trade barriers since the 1990s, import duties are still high compared to other Asian countries.