World economy on track for strong 2007

PARIS, Dec 6, 2006 (AFP) – Slowing activity in the US economy and a possible sudden cooling of overheated property markets are the main threats to the world economy in 2007 after vigorous recovery this year.

The International Monetary Fund said Tuesday it was lowering its growth estimate for next year from its current prediction of 4.9 percent.

But its chief economist John Lipsky added that the IMF nonetheless continued “to anticipate a favorable environment for growth” and said he saw “no obvious reason to be concerned” by the recent plunge in the dollar against the euro.

The world is continuing to benefit from its most prolonged economic expansion since the 1970s, with growth of about 5.0 percent for each of the last four years.

Even record high oil prices, which this year hovered around 80 dollars a barrel, did not manage to apply the brake to economic growth.

And despite the so-called Doha round of World Trade Organisation negotiations being stalled, global commerce is booming, buoyed by emerging economies like China and India.

Prudent optimism is the prevailing mood in the international institutions that watch over the global economy.

The Organisation for Economic Cooperatio