The World Bank and the International Monetary Fund (IMF) predicted on Wednesday that global economic growth would slow down significantly in 2005, and they warned that the United States' ballooning trade imbalances could disrupt world markets if foreign investors stop buying American debt.
"Global expansion has become less balanced, with global growth continuing to be unduly dependent on the United States and China," said Rodrigo de Rato, managing director of the International Monetary Fund.
Mr. de Rato said a number of "downside risks" could catch investors by surprise. Those risks included higher oil prices, rising fears of inflation and, not the least, the United States' large and growing indebtedness to the rest of the world.
"The demand for U.S. assets is not unlimited," Mr. de Rato warned, noting that bond markets were badly shaken last month by the mere hint that Asian central banks might begin to reduce their holdings of United States Treasury securities.
"A sharp reduction, or a reversal, of capital inflows could entail serious consequences for currency and capital markets," Mr. de Rato said.
In a separate report, the World Bank said that global growth had probably "peaked" at 3.8 percent last year and would probably slow to about 3.1 percent this year. Among the reasons, it said, were rising interest rates, high oil prices and less stimulative fiscal and monetary policies in many countries.