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The world economy is posting solid growth in 2005 but high oil prices and global imbalances pose a threat to global economic growth. This was the major topics of the joint spring meeting of the International Monetary Fund ( IMF) and the World Bank which ended on Sunday.

The year 2004 saw the strongest global economic growth for three decades after the world economy's weak performance for several years. The global economy grew 5.1 percent last year compared with a 4-percent gain in 2003.

Both developed and developing countries made great strides in the year. The economies of the United States, the euro zone and Japan rose 4.4, 2 and 2.6 percent respectively. The economy in Asia's developing countries also surged 8.2 percent last year following a robust 8.1 percent growth in 2003.

All forecasts now show that the global economic growth will continue in a solid pace this year and in 2006.

The latest World Economic Outlook (WEO) released by the IMF before the meeting said the world economy is expected to grow 4.3 percent this year and 4.4 percent next year, all slower than 2004. However, the IMF noted that the global economic expansion has remained broadly on track and the slowdown is reflecting partly a return of the world economy to a more sustainable pace.

Meanwhile, there remain a number of major threats to global economic growth, including increasingly unbalanced global expansion and a sharp increase and volatility in oil prices.

The IMF warned that the impact of further sharp rises in oil prices could be stronger, especially if they were to hit confidence and adversely affect inflationary expectations. There would also be a greater danger of negative supply-side effects in the long run.

During the meeting, the Group of 20 developing countries said they valued the stabilizing role that oil-exporting countries play in the oil market, underscoring the importance of closer cooperation between importers and exporters to promote market stability.

Group of Seven industrialized nations also expressed their worries that higher oil prices are a headwind to the global economic growth and that the expansion is less balanced than before.

They "welcome efforts to improve oil market data, increase medium-term energy supply and efficiency," the G7 said in a statement after a meeting of financial ministers.

The risk of higher oil prices to world economic growth will remain there for a quite long time, analysts said. The IMF noted after its policy-making session on Saturday that condition in the oil market will remain tight in the medium term, reflecting strong global demand, low excess capacity and supply concerns. It underscored the importance of stability in oil markets for global prosperity.

The fact the global economic expansion is becoming increasingly unbalanced is also a risk facing the world economy.

Global growth remains unduly dependent on the United States and China while growth in the euro zone and Japan -- together accounting for nearly a fourth of global output -- has once again been disappointing.

The WEO report said GDP growth in the euro zone slowed markedly in the second half of last year and is expected to be 1.6 percent this year and speed up to 2.3 percent in 2006.

Japan's economic growth has also stalled since the second quarter of 2004 and it will slow sharply this year to 0.8 percent from 2.6 percent in 2004 and is expected to recover to 1.9 percent next year, the report said.

If the situation persists, it would widen global imbalance and would also raise the risks of a more significant slowdown later on, especially if growth in the United States and China were to weaken simultaneously, it added.

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

To ensure orderly adjustment of global imbalance and to help achieve more sustainable external positions and stronger medium- term growth, the IMF called for concrete actions by all to implement the agreed policy response in a timely and effective manner.