World growth for this year has been forecast at a 3 decade high by the International Monetary Fund, the world's leading financial watchdog. But this upbeat forecast for the current year will be followed by a slowdown next year. Record oil prices is an alarm to the world to take action to boost production or reduce energy use to prevent a global economic slowdown. The impact of rising oil prices, however is estimated to be "moderate", especially compared with the recession of the mid-1970s. Infact, many feel that slowdown and subsequently a decline in demand for oil will reduce the pressure on oil prices.

The world economy is forecast to expand by 5% this year but will slow to 4.3% next year, a downward revision of 0.1 percentage points from earlier spring forecasts. If the recent rise in oil prices of US$8 a barrel sustain for a year, it would wipe about 0.5 of a percentage point from growth. As per the ADB:

	US economy is forecast to grow by 4.3% in 2004 and 3.5% next year.
	China recorded 9.8% GDP growth in Q1-2004, 9.6% in the Q2. GDP growth forecast for China the year is at 8.8%, but 2005 projection is down to 8%.
	South Korea’s expected GDP growth for 2004 is 4.4%, forecast down to 3.6% next year due to weak domestic demand weighed down by a heavy household debt burden.
	Malaysia and Singapore have seen significant growth in business investment, aided by brisk global demand for their exports. The GDP growth forecast for Malaysia for 2004 is at 6.8% and 6% for 2005.
	Indonesian presidential election should boost confidence in the economy. GDP growth forecast for the country for 2004 is 4.8% and 5.2% next year.
	Thailand will continue to show healthy growth, GDP growth is forecast at 6.4% this year, 6.6% next year.
	Indonesian presidential election should boost confidence in the economy. GDP growth forecast for the country for 2004 is 4.8% and 5.2% next year.
	In India GDP growth forecast for 2004 is 6.5%.
	Euro-zone GDP growth is forecast between 1.6%-2.2% this year and 2.8% next year.