China will become the biggest driver of global economic activity this year for the first time, the International Monetary Fund said. The Times. Financial Times

As the IMF raised its forecast for global GDP growth from 4.9% to 5.2% for 2007/08, it warned that volatile financial markets pose more of a threat.

The fund said stronger growth in big emerging market countries, particularly China, India and Russia, had brightened the economic outlook.

It raised its forecast for world growth for this year and next by 0.3 percentage points to 5.2%. A slight downgrade in projected US growth was countered by a 1.2 percentage point rise in expected growth in China. The Indian economy was expected to grow at 0.6 percentage points faster than thought in April, when the IMF last reported. Growth projections were also raised for the eurozone, particularly Germany, and Japan.