The International Monetary Fund, in its forthcoming half-year report on the world economic outlook, will call for higher interest rates to slow down the US economy and avoid a hard landing.
It will raise its forecast for growth in world economic output this year from 2.3 per cent to 2.8 per cent, including improved growth forecasts for all the Asian crisis countries.
Its forecasts for the European Union are unchanged since May, although it says the risks of growth being weaker have been reduced.
Details of the IMF report were revealed in a letter from Mr Gerrit Zalm, Dutch finance minister, to the finance committee of the Dutch lower house of parliament.
According to the report, expansion of the US economy continues "almost without price or wage pressure".
But the IMF sharply raised its forecast for US growth - to 3.7 per cent from 3 per cent in May - and warned that tighter monetary policy might be needed.
"In order to limit the risks and to prevent overheating, timely increases in interest rates are probably needed and the sober budget policies of recent years must be maintained."
The document also claims the IMF intends to revalue 10 million ounces of its 103 million-ounce gold reserves to market value, after agreement on debt relief for poor countries became "politically unreachable". Spot gold prices rose to $256.20 per ounce on the news, but dropped back to close at $255.75 in London.
The IMF said yesterday it would not comment on the accuracy of the information published by the Dutch.
"Invariably the World Economic Outlook figures are revised, virtually up to the publication date," it said.
In the document, the IMF says the outlook for the world economy has been "considerably improved".
It has raised its growth forecast for world economic output this year from 2.3 per cent to 2.8 per cent. Recessions in Russia and Brazil have proved less deep than expected, while the economies of Japan and Europe are expected to accelerate.
The main risk the IMF sees is the continued imbalances in the current accounts of the US, Japan and Europe, and the methods by which these are being reduced. "The way this is done will determine how economic conditions continue," the summary said.
On the European Union, it says: "Monetary policy in general is appropriate to the present situation."
The IMF does not consider it likely that changes in official rates will be necessary this year.
If the euro zone's recovery is below expectations, the IMF sees room for further reduction of rates and tax cuts.
"Most fiscal programmes are insufficiently ambitious and efforts must be increased to reduce the pressure of taxes and achieve budgetary balance or surplus in 2002," the summary said.
"To reduce structural deficits and reduce the tax burden, limits to the growth of spending are necessary, in particular spending on subsidies, pensions and social security."
