Led by China's booming economy, stronger than expected global financial growth continued in the first half of this year, the IMF said.
In the first in a series of updates to its twice-yearly Global Economic Outlook, the IMF projected global growth of 5.2 percent for this year and next, up 0.3 percentage points from 4.9 percent in its April outlook.
Presenting the report, Charles Collyns, the IMF's deputy director of research, said on Wednesday: "This year, for the very first time, with very strong growth expected and with a growth slowdown in the United States, China will be the largest contributor to global growth," whatever standard is used to measure an economy's size.
China's economy sped up in the second quarter of the year to its fastest growth rate since 1995 -- 11.9 percent -- driven by surging exports and investment, according to data released in Beijing last week.
The figures put China on track for a fifth year of double digit growth and to replace Germany as the world's third-largest economy.
The IMF projected China's growth rate at 11.2 percent for this year and 10.5 percent for next year.
Taking China, India and Russia together, Collyns said, the three countries are likely to contribute about half of the world's output growth.
"China is certainly going from strength to strength at this point," he told reporters.
Consumer spending has finally joined investment as a pillar of economic growth in China, Collyns said.
"It shows some progress is being made in rebalancing the Chinese economy," he said.
The IMF said that although growth in the US, the world's largest economy, slowed in the first three months of the year, recent indicators suggest that the economy gained momentum in the second quarter.
The IMF slightly lowered its forecast for this year for the US to 2 percent and raised it to 2.8 percent for next year.
Collyns said more will be known about the US when the government releases second quarter growth figures today.
The IMF said that, in the euro currency countries and in Japan, "growth has remained above trend with some welcome signs that domestic demand is taking a more central role in the expansions."
The projection rate for Germany, the main economic driver in the euro area, was raised 0.8 percent to 2.6 percent because the impact of its increase in sales tax at the beginning of the year has been much less than expected, Collyns said.
He said inflation worldwide remained generally well contained despite strong global economic growth -- although some countries with emerging economies and developing countries experienced rising pressures, especially from energy and food price.
As these pressures continue, he said, central banks will need to tighten monetary policy by raising interest rates.
The IMF said the overall risks to the global economy remain tilted modestly to the downside
"The risk of an oil price spike remains a concern," the IMF said. "Financial market risks have also increased as credit quality has deteriorated in some sectors and market volatility has increased."
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