GENEVA, Jan 9: The World Economic Forum on Wednesday voiced fears of a recession in the United States over the next 12 months and expressed doubts that consumption-led growth in Asia could take over as driver of the global economy.

In a report issued for discussion at its annual meeting later this month of global political, financial and business leaders in the Swiss resort of Davos, it also warned that the world looked headed for a long-term rise in food prices.

The report, based on the views of over 100 senior figures working with the Forum, said “the scale and nature” of the financial crisis of 2007-2008 had raised serious questions about the vulnerability of the current model of financial markets.

“Diversification of risk may have strengthened stability in good times, but systemic financial risk remain acute,” it declared.

“Looking at the year ahead, a US recession is possible and economists are divided over whether consumption-led growth in Asia can drive the global economy.”

In Europe, it said, the prominence of Britain’s financial sector made it also vulnerable, while large current account deficits in some central and eastern European economies “may prove increasingly unsustainable in 2008.”

The report was compiled on the basis of input from business leaders, decision-makers, scientists and leading academics who have met throughout 2007 as part of the Geneva-based Forum’s Global Risk Network.

On food, they saw recent price rises — which took the consumer cost of many staples to all-time highs while reserves hit a 25-year low — continuing under the influence of population growth, climate change, lifestyles, and use of crops for biofuels.The report saw the world facing a growing problem of guaranteeing a secure and stable supply of energy resources while striving, in line with international commitments, to reduce greenhouse gas emissions.

Amid predictions that oil demand will rise by 37 per cent over present levels by 2030, it said, there appeared to be little scope for any fall in energy prices over the next decade.

The Forum saw another possible threat emerging as a result of an otherwise beneficial improvement in technology and global logistics which have led to the “historic expansion” of international trade over the past two decades.

Although these developments had increased efficiency and boosted global prosperity, over-reliance -- what the report called “hyper-optimisation” -- on supply chains might also increase vulnerability to disruption for firms and whole countries, the report said.—Reuters