"We meet at a time of rising optimism about the global recovery," Koehler told a news conference ahead of the International Monetary Fund's annual meeting here between September 23 and 24.

The IMF would discuss how best to "nurture" this recovery and help the global economy return to a period of sustainable growth after two years in the doldrums, he said.

But Koehler outlined two major risks that threaten to derail the nascent upturn -- large current account deficits across the world and high levels of debt in many countries.

"This is no time for complacency," he said.

The United States is currently running massive budget and current account deficits, while many European countries have worked up large budget shortfalls, to the fury of the EU's executive arm.

Washington's budget deficit is projected to hit 480 billion dollars in 2004, prompting warnings that it could be creating problems in the medium term with a borrowing-fuelled dash for growth.

Its current account deficit hit 138.7 billion dollars in the second quarter, and many economists believe a disorderly fall in the dollar will result when this deficit ultimately unwinds.