WASHINGTON -- The world economy this year should post its best growth in three decades even though oil prices are up sharply and economic activity in the United States probably will be slower than previously thought.
Those were some of the assessments in the International Monetary Fund's latest World Economic Forecast released yesterday.
After expanding by 3.9 percent in 2003, the global economy is now projected by the IMF to grow by 5 percent in 2004. That is a better forecast for this year than the 4.6 percent increase estimated in April. Should the new projection prove accurate, it would mark the strongest growth since 1973, an IMF spokesman said.
Global growth has been helped by factors that include rising corporate profitability, improved stock markets, strong housing markets, and gains in employment, the agency said.
The revised projection for 2004 is encouraging for an economy battered by recession, terrorist attacks, and war. But rising oil prices are still a concern, the IMF said.
The IMF predicted the US economy will grow by 4.3 percent this year, compared with an earlier estimated increase of 4.6 percent. Even so, the revision would represent the best showing since 1999 and an improvement over the 3 percent gain in 2003.
For 2005, the global economy is expected to see slower growth, expanding by 4.3 percent, compared with the 4.4 percent estimate from the IMF in April.
''Looking forward, the global expansion -- while still solid -- will therefore likely be somewhat weaker than earlier expected," the IMF said.
''The balance of risks has shifted to the downside with further oil price volatility a particular concern."