The International Monetary Fund said Tuesday it was lowering its growth estimate for next year from its current prediction of 4.9 percent.

But its chief economist John Lipsky added that the IMF nonetheless continued "to anticipate a favorable environment for growth" and said he saw "no obvious reason to be concerned" by the recent plunge in the dollar against the euro.

The world is continuing to benefit from its most prolonged economic expansion since the 1970s, with growth of about 5.0 percent for each of the last four years.

Even record high oil prices, which this year hovered around 80 dollars a barrel, did not manage to apply the brake to economic growth.

And despite the so-called Doha round of World Trade Organisation negotiations being stalled, global commerce is booming, buoyed by emerging economies like China and India.

Prudent optimism is the prevailing mood in the international institutions that watch over the global economy.

The Organisation for Economic Cooperation and Development said last month in its latest review of the world economy: "All considered, the outlook for the OECD area remains favourable."

The 30 OECD countries should show growth next year of 2.5 percent, and in 2008, they would grow by 2.7 percent.

The United States seemed on course for a "soft landing" and the eurozone was unexpectedly robust as part of an evening-out of growth which might well avert "a major slowdown" as in 2000, the OECD said..

OECD chief economist Jean-Philippe Cotis commented that the Chinese yuan remained undervalued and that a rise of the currency would be in China's interests.

The Japanese economy would grow by 2.0 percent next year, down from an earlier estimate of 2.2 percent.

However, Asian countries, learning from their currency crises in the 1990s, had built up dollar "war chests", the OECD said.

An eventual reduction of the US current account deficit would probably involve "further adjustment in the dollar exchange rate" which could involve "sharp movements not only in exchange rates but also in interest rates."

But now, US monetary authorities should think about easing interest rates late next year, the European Central Bank should consider tightening rates further, and Japanese authorities should provide room for prices to rise so as to bury deflation.