FRANKFURT (Reuters) - The global economy faces its most difficult test in many years with growth slowing sharply as high commodity prices put pressure on inflation, a senior International Monetary Fund official said on Tuesday.

IMF first deputy managing director John Lipsky said global growth was set to slow further in the second half of 2008, and continued financial sector strains were a major risk to the chances of recovery in 2009, on top of high oil prices.

Commodity prices remained high and volatile, bringing risks of knock-on inflation effects, but recent sharp falls in oil prices should lessen short-term inflation pressures in the developed world, he told a conference.

Central banks in advanced economies could afford to keep interest rates on hold. In regions with high real rates, they could look out for easing price pressures which would allow them to loosen policy later, he said.

"Against the backdrop of protracted financial strains and dramatic surges in commodity prices, the global economy is confronted with its most difficult set of circumstances in many years," he said. "The good news is, we are only three to six months from the bottom, when the upturn begins."

Speaking at the same conference, European Economic and Monetary Affairs Commissioner Joaquin Almunia said the European Union needs to take urgent action to avoid a prolonged economic downturn and return to stronger growth.

Lipsky said the IMF was still reviewing its forecasts, which are due to be updated in its World Economic Outlook next month. But the fund saw global growth slowing from 5 percent in 2007 to about 3 percent late in 2008, reaccelerating towards 4 percent in 2009.

The IMF's last forecasts in mid-July were for global growth of 4.1 percent in 2008 and 3.9 percent in 2009. A G20 source told Reuters last month that these would be downgraded to 3.9 percent this year and 3.7 percent in 2009.

Lipsky said the 2009 pickup would be driven by an unwinding of the effects of the past 50 percent increase in oil prices and a bottoming in the U.S. housing sector. Oil traded at a five-month low below $105 per barrel on Tuesday.