Patrick Worsnip, Reuters

Published: Wednesday, January 09, 2008

UNITED NATIONS -- The United Nations warned on Wednesday of "clear and present dangers" of the world economy coming to a near standstill this year because of U.S. housing and credit problems and the weak dollar.

In an annual report, the world body forecast global economic growth at 3.4% for 2008, only slightly lower than last year, but said that under a pessimistic scenario, if U.S. difficulties were acute, it could be just 1.6%.

The bursting of a housing bubble in the United States last year and a crisis over "subprime," or risky, mortgages had caused uncertainty across financial markets around the world, said the World Economic Situation and Prospects 2008.

Together with the decline of the dollar and imbalances between countries running surpluses, such as China, Japan and major oil producers, and those with big deficits, especially the United States, this could drag world output down, it said.