Rato, who was attending the Asia-Pacific Economic Cooperation forum meeting of finance ministers, said the IMF global outlook for 2004 set to be released in October would be "slightly above" the April forecast of 4.6 percent.

Rato noted however that "some downside risks have increased" including the recent spike in crude oil prices.

But he said that even though some recent economic data have been below expectations, "the recover should continue in 2004 and through 2005."

Rato repeated IMF concerns about the United States and Europe.

He said US officials should take steps to address the "twin deficits," referring to the budget gap and massive trade imbalance.

As for Europe, he said officials "should not make the same mistake as in 1999, when they were unable to take advantage of the recovery to put their public finances in order."