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Last Updated: Wednesday, 25 July 2007, 17:05 GMT 18:05 UK
IMF raises global growth forecast
Shanghai commuters
The IMF says China will be the biggest contributor to global growth
The International Monetary Fund (IMF) has raised its forecast for growth in the global economy for this year.

It cites accelerating growth in China, India and Russia and says that the US economy may be getting back on track.

It predicts global growth of 5.2% for this year and next year, up from its April forecast of 4.9% for both years.

China's growth forecast in 2007 has been raised from 10% to 11.2%, and for the first time it will become the biggest element in worldwide growth.

"With a growth slowdown in the United States, China will be the largest contributor to global growth," the IMF's Charles Collyns said.

Inflationary pressures

China, Russia and India account for more than half of the increase of 5.2% in global economic growth this year..

But the picture was not all rosy, with the IMF warning of growing inflationary pressures, especially from rising energy prices.

It says that central banks are more likely to raise interest rates than they were in April.

It also warned that risks in the financial markets had grown, partly as a result of the number of defaults in the sub-prime mortgage market.

Growth in the euro area has been revised up from 2.3% to 2.6%.

The IMF said that while growth in the US had slowed in the first three months of the year, there are signs that it has gained momentum since then.

Although it lowered its forecast for the US this year from 2.2% to 2.0%, it has kept the 2008 forecast unchanged at 2.8%.

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