U.S. warning at Davos forum

DAVOS, Switzerland -- The U.S. economic slowdown could have global impact, an International Monetary Fund official warned world business leaders.

IMF Deputy Director Stanley Fischer told the World Economic Forum on Saturday it was leading the IMF to lower its rosy predictions for the world.

"A lot depends on the United States," said Fischer, at the start of a day during which anti-globalisation activists pledged to defy a ban on demonstrations.

About 3,200 politicians, business people and cultural leaders are attending the 31st forum to discuss international trade and economies.

Authorities are keen to prevent a repeat of last year's scenes of unrest when protesters broke a window at a McDonald's, vandalised cars and burned a U.S. flag.

Rail services to Davos and nearby Klosters, another ski town, are being shut down for 10 hours to keep any last-minute stragglers away.

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Roadblocks have been tightened and police said they are even considering spraying cow manure on protesters as a last resort.

Despite the ban, protest organisers say more than the 1,000 protesters who showed up at last year's forum are converging on Davos.

But as demonstrators who have made it to Davos protest at what they term "globaloney," business and political leaders continue to focus on steadying the global economy.

Fischer, told conference participants that because of the recent slowdown in the U.S. economy it is revising its prediction last September that the global economy would grow by 4.2 percent.

The new prediction will be considerably lower, "possibly in the range of 3.5 percent," said Fischer. But, he added: "we are a long way from a global recession."

Japanese Prime Minister Yoshiro Mori was to cover his country's woes separately, while Oprah Winfrey, Quincy Jones and AOL Time Warner president Richard Parsons were seeking to draw attention to a foundation to aid children.

Colombian President Andres Pastrana cancelled an appearance, though organisers were unsure of the reason.

On Friday the first full day of the six-day conference, Mexican President Vicente Fox captured the mood at this Alpine resort with a mix of bravado and concern.

"Mexico will be the next success story of our time!" he said, while conceding that his country could be battered if exports to its northern neighbour dry up.

"But we are not going to stay sitting at our desk waiting to see what happens," he said. "That's why we're here."

European officials shrugged off predictions that the U.S. economic slowdown could cause a crisis in Europe.

About 85 percent of trade done by the 12 countries using the euro is with each other -- providing a good measure of insulation to troubles across the Atlantic, they noted.

Job creation is "impressive," and consumer demand is strong, partly due to big tax cuts passed last year in Germany and France.

"Europe is viewed as being the steady and growing element of the whole system," said French Finance Minister Laurent Fabius.

The Associated Press contributed to this report.

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