WRAPUP 3-Inflation, oil prices create new challenges – IMF

 * IMF maintains 2011 global growth forecast at 4.4 pct
 * Higher oil prices, inflation pose new risks to economy
 * Overheating a growing concern in emerging economies
 (Adds quotes from news conference)
 By Lesley Wroughton
 WASHINGTON, April 11 (Reuters) - Soaring oil prices and
inflation in emerging economies pose new risks to global
recovery but are not yet strong enough to derail it, the
International Monetary Fund said on Monday.
 The global lender's latest health-check of world economic
prospects marked a departure from recent years when its focus
was on the financial crisis and recession in rich nations.
 The fastest growth in recent years has come from emerging
markets like China, Brazil and India, which helped offset the
deep downturns in the United States and other rich nations
touched off by burst housing bubbles.
 Now, the IMF warns those very economies risk asset bubbles
akin to the ones that sparked the 2007-2009 financial crisis.
 "The challenge for many emerging and some developing
economies is to ensure that present boom-like conditions do not
develop into overheating over the coming year," the IMF said in
its World Economic Outlook report.
 IMF chief economist Olivier Blanchard said there was no
overwhelming threat to the world economy, but there were
trouble spots that need to be dealt with.
 "There is not any major downside risk at this point," he
told reporters. But he cited a still-ailing financial sector in
Europe and a high U.S. debt load as areas demanding attention.
 Still, even the prospect of oil above $120 a barrel was
seen as not enough to imperil the steady global expansion.
 "Commodity prices have increased more than expected ...
(but) we don't think that this time these increases will derail
the recovery," Blanchard said.
 For more stories on the upcoming IMF, World Bank and G20
meetings, see [G7/G8]
 For a diary of events see [IMF/DIARY]
 The IMF's central scenario remains one of slow-paced
recovery. It kept its forecasts for global growth for both 2011
and 2012 at 4.4 percent and 4.5 percent, respectively.
 However, it said emerging markets have become a particular
worry spot. The Fund warned they faced the risk of inflation as
they struggle to deal with hard-to-control capital inflows.
 "We are warning emerging market countries that they are
getting to the point where things may be too good," Blanchard
 The IMF highlighted the searing impact of rising food and
commodity prices on poorer countries and warned that inflation
will remain elevated for a while.
 Soaring costs for basic staples stoked the social and
economic tensions that have roiled the Arab world. Street
protests have toppled dictatorships in Egypt and Tunisia, and
left leaders in Yemen and Libya fighting to cling to power.
 The Fund said inflation pressures were likely to build in
developing countries as people pushed for higher wages in the
face of pricier food and fuel.
 Somewhat surprisingly, the IMF said it saw little lasting
impact from Japan's triple disaster -- earthquake, tsunami and
nuclear crisis -- although it cautioned of great uncertainty.
 It cut its 2011 forecast for Japanese growth only slightly
and raised its projections for 2012.
 Speaking of advanced economies collectively, the IMF said a
recovery was continuing and risks of a "double-dip" recession
had faded. But it said unemployment was still high and more had
to be done to cut budget deficits in the U.S. and elsewhere.
 Blanchard said other countries would need to become a
greater source of global demand if the United States were to
tighten its belt as much as needed.
 The fastest growth was still in emerging economies, the IMF
said. China was expected to lead the way with 9.6 percent
growth this year, followed by India, at an 8.2 percent rate.
 By contrast, the United States was forecast to grow a
sub-par 2.8 percent this year and 2.9 percent in 2012.
 In Europe, the IMF said recovery was gaining traction
despite financial turbulence in Greece, Ireland and Portugal.
The IMF revised up its euro zone outlook to 1.6 percent this
year and 1.8 percent in 2012.
 In advanced economies, strengthening the recovery will
require keeping monetary policy accommodative as long as wage
pressures are subdued, inflation expectations are under control
and bank credit is sluggish, the Fund said.
In emerging economies, the IMF said, it would be a mistake
for policymakers to delay additional policy tightening until
rich nations start to raise their rates.
 (Additional reporting by Glenn Somerville, Lucia Mutikani and
Doug Palmer; Editing by Neil Stempleman and Andrew Hay)

WRAPUP 3-Inflation, oil prices create new challenges - IMF