The world economy is expected to log solid growth, which will be likely to clock in approximately five percent increase in 2006 and 2007, said Rodrigo Rato, chairman of the International Monetary Fund (IMF) while addressing the Brookings Institution, a leading think-tank, on Sept. 5. He also referred to China and India in his speech as important "engines" of world economic growth.

A host of growth points have emerged in the world economy, Rato acknowledged, despite a cool-down in the of the U.S. economy. Apart from the "engines" of China and India, Europe and Japan are recovering economically and the areas south of the Sahara Desert in Africa will maintain an economic growth momentum these two years.

IMF projected the world economic growth at 4.9 percent this year and at 4.7 percent in 2007 in its original April report. Rato's September 5 speech, however, has revised the IMF previous prediction with an optimistic outlook for global economic growth.

Meanwhile, Rato warned in his speech that the global economy is facing more challenges than a year ago, resulting mainly from, among other factors, still higher oil prices, greater possibility of inflation pickup and the imbalance between trade and investment.

Consequently, Rato prompted all the nations around the world to get prepared to address these challenges.

By People's Daily Online