New IMF chief raises world growth forecast

The world economy will grow by 4.75 per cent this year, according to Horst Köhler, the new managing director of the International Monetary Fund. The forecast, a significant upward revision of the IMF's prediction in April of 4.2 per cent growth, mainly reflects the strength of the US economy.

The world economy will grow by 4.75 per cent this year, according to Horst Köhler, the new managing director of the International Monetary Fund. The forecast, a significant upward revision of the IMF's prediction in April of 4.2 per cent growth, mainly reflects the strength of the US economy.

"This performance is the historical proof that innovation, structural change and flexibility are indispensable for prosperity and a better future for the people," Mr Köhler said in his first major speech since taking over in May. There would also be strong growth in Europe and Asia this year, he said. He stressed the need for reform of the IMF to tackle poverty and make globalisation acceptable.

More protests against the IMF are expected at its annual meeting in Prague at the end of next month. Mr Köhler said he would take reform proposals to the meeting. It was important that the fund "refocus" as it had been too stretched, he said.