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The global economic growth this year is stronger than the projection made later last year, despite higher oil prices and natural disasters, the International Monetary Fund (IMF) said on Wednesday.

In its latest semi-annual World Economic Outlook report released before the joint spring meeting of the IMF and the World Bank, the IMF said that the growth of global gross domestic products (GDP) is estimated at 4.9 percent in 2006, 0.6 percentage point higher than projected in the last IMF meeting held in September 2005.

The world economy will ease to 4.7 percent in 2007 and continued headwinds from high oil prices are expected to be offset by a gradual pickup in investment, as increasing capacity constraints encourage corporates to reduce their net saving, the report said.

Global industrial production has picked up markedly from mid-2005 and the service sector remains resilient, the IMF said. World trade growth is close to double-digit levels and consumer confidence and labor market conditions all over the world are strengthening.

It predicted that GDP growth in the United States is expected to moderate slightly to 3.4 percent in 2006 from 3.5 percent in 2005, but still the highest among the Group-7 industrialized countries and a major engine of world economic growth.

Meanwhile, the economic gain in the Euro area is predicted to be 2 percent this year, much stronger than the 1.3 percent in 2005. Japan's growth will increase to 2.8 percent this year, also slightly higher than the 2.7 percent last year.

Economic activities in emerging market and developing countries remain very strong, with forecasts revised upward in most countries and regions, the IMF said. GDP growth in both China and India has continued to surprise on the upside, driven by strong domestic demand and a rapidly rising current account surplus in China.

It predicted that the economic growth in developing Asia will be 8.2 percent this year, slightly lower than the 8.6 percent in 2005. Economic increases in China and India are expected to be 9.5 percent and 7.3 percent respectively in 2006, compared with the 9.9 percent and 8.3 percent in 2005.
 
The IMF also said that GDP growth in sub-Saharan Africa is estimated to rise from 5.5 percent in 2005 to 5.8 percent in 2006,the highest in over three decades. However, the pickup owes much to the surging growth in oil-producing countries.

Meanwhile, the IMF warned that there are four primary concerns to the global economic growth in the near future, including high and volatile oil prices, a tightening in financial market conditions, rising global imbalances and a possible avian flu pandemic.

Facing these challenges, the IMF report suggested the policy-makers of IMF members make more rapid progress in addressing global imbalances, ensure sustainable medium-term fiscal positions and put in place the preconditions to take advantage of globalization and support global growth in the future.

(Xinhua News Agency April 20, 2006)