"In the current context of continued very robust growth and rising prices in energy, commodities and food, to sustain this favorable outlook will require keeping inflation and inflation expectations under control," IMF deputy managing director John Lipsky said.

"That may require policy actions," he added, on the sidelines of an Asia Pacific finance ministers' meeting here.

Lipsky said inflationary pressures were building.

"Clearly many economies are now sustaining trend-like growth or perhaps even greater than trend-like growth that has been accompanied by a decline in unemployment rates and therefore, by conventional measures, high and rising rates of capacity utilisation," he said.

"Those are the areas where it may be appropriate for further normalisation of monetary policy."

Lipsky refused to specify which countries he was referring to but said lifting interest rates had helped produce sustainable economic growth in the past.

An IMF executive board evaluation of the eurozone economy released on Tuesday said monetary policy may need to be tightened in the combined economy of the 13 eurozone member states.

"Inflationary pressures could be expected to build gradually and some further monetary policy tightening might be required," it said.

IMF PLAYS DOWN SHARE MARKET FALLS

Another report adds: The IMF on Thursday played down recent share market turmoil and said it would not lower its global economic outlook.

International Monetary Fund (IMF) deputy managing director John Lipsky also said interest rates may need to rise in some countries to keep inflation under control.

Commenting on share market volatility caused by concerns about the US sub-prime mortage market, Lipsky said the IMF had predicted months ago that a correction in credit markets was possible.

He said the turmoil reflected a market that was becoming more risk averse.

"Market discipline, when it arrives, is almost inevitably uncertain in terms of timing, somewhat uneven in terms of impact and to the outside observer inevitably appears a bit messy," Lipsky said.

"But in the broader sense it tends to be effective ... it has not led us to think that we need to rethink our broader outlook," he told reporters at the meeting of Asia Pacific Economic Cooperation (Apec) finance ministers.

Lipsky said the IMF stood by a forecast released last week that the world economy would grow 5.2 percent in 2007 and 2008.

He said some large economies needed to look at increasing interest rates in response to inflationary pressures partly caused by high fuel prices.

"Clearly many economies are now sustaining trend-like growth or perhaps even greater than trend-like growth that has been accompanied by a decline in unemployment rates and therefore, by conventional measures, high and rising rates of capacity utilisation," he said.

"Those are the areas where it may be appropriate for further normalisation of monetary policy."

Lipsky refused to specify which countries he was referring to but said lifting interest rates had helped produce sustainable economic growth in the past.

Australian Treasurer Peter Costello said the 21 Apec finance ministers would discuss how to maintain economic growth at the two-day meeting at a beachside resort in Coolum, in Queensland state.

"As we meet today, of course new challenges are emerging to the global economic outlook," Costello said.

"I hope over the next two days we can discuss these challenges, how we as a region and as ministers are preparing to meet those challenges.

"I hope we can discuss growth in the region which is important to lift people out of poverty and to raise living standards."