UPDATE 2-Oil, food prices may further dampen growth -IMF

(Adds quotes, details on oil in paragraph 4, background)

By Lesley Wroughton

WASHINGTON, May 22 (Reuters) - The International Monetary Fund said on Thursday it is sticking to world economic forecasts for now, but cautioned that much higher global prices for oil and food could dampen growth.

"Despite increasing oil prices, the broad contours of the fund's assessment of the global outlook remain unchanged at this stage," IMF spokesman David Hawley told reporters.

"Significantly higher oil and commodity prices could have a dampening effect on growth if prices remain at elevated levels," he added.

His comments came as crude oil rose to a record above $135 a barrel on Thursday and OPEC oil ministers said they could do nothing to lower oil prices, calling the market "crazy." By the end of the day U.S. crude settled down $2.36 to $130.81.

Turning to global credit markets, Hawley said the ability of banks to raise capital was "reassuring" although a protracted adjustment in financial sector balance sheets is still likely.

The Washington-based IMF has twice cut its growth forecast for the world economy this year -- in January and again in April. In its last outlook in April, it warned the United States was headed for recession this year and put world growth at 3.7 percent in 2008.

That was down from a forecast in October of growth of 4.8 percent and a forecast in January of 4.1 percent, as it tried to account for the world's fast-spreading credit turmoil.