The International Monetary Fund (IMF) on Saturday warned of risks like high oil prices, global imbalance, currency volatility and a potential spike in interest rates, despite prospects for a "robust" growth.

While "global growth will likely remain robust in 2005," "widening imbalances across regions and the continued rise in oil prices and oil market volatility have increased risks," the International Monetary and Financial Committee (IMFC), the policy-making body of IMF, said in a communique issued after its semi-annual meeting.

Condition in the oil market will remain tight in the medium term, reflecting strong global demand, low excess capacity and supply concerns, the IMFC warned.

Underscoring the importance of stability in oil markets for global prosperity, the committee called for removal of disincentives to investment in oil production and refining capacity, while urging promotion of energy sustainability and efficiency.

The communique also said that the potential for a sharper-than-expected rise in long-term interest rates and increased exchange rate volatility "calls for vigilance".

The IMFC said all countries have a shared responsibility to take advantage of the current economic condition to address key risks and vulnerabilities.

Concrete actions by all are needed to implement the agreed policy response in a timely and effective manner, said the communique.

The IMFC meeting came shortly after talks held here by the Group of Seven (G7), which also warned of the impact of high oil prices on growth.

The G7 countries said on Saturday that the world economy is posting "solid growth" in 2005, but high oil prices and global imbalances pose a threat to the global economic growth.

Source: Xinhua