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Politics : Clinton -- doomed & wagging, Japan collapses, Y2K bug, etc
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To: SOROS who wrote (374)9/19/1998 10:27:00 AM
From: SOROS   of 1151
 
BBC - London - 09/19/98

Brazil could be the next country to plunge into a crisis

A respected economic forecaster has warned that the world economy could stall or even contract over the next 18 months as the financial crisis that has hit Asia and Russia spreads throughout the world.

The Economist Intelligence Unit (EIU) has issued one of its gloomiest ever reports on the outlook for economic growth.

The EIU believes that, even if the financial crisis does not deteriorate further, the world's economy is heading for a rough ride.

And there is a real danger that the global financial crisis could get significantly worse, with problems in Asia and Russia spreading to Latin America according to the research.

If that happens the world economy could grind to a halt or slip into recession.

However the EIU does not believe that the economy will plunge into a prolonged recession lasting several years as it did in the 1930s in the wake of the Wall Street crash.

The EIU believes the key factor will be how the US Federal Reserve reacts to the financial problems and whether or not it chooses to cut interest rates.

Economists have been downgrading their forecasts of world growth over the last few months after Russia was forced to face up to its financial crisis.

There have also been signs of growing problems in Brazil. The country's financial system is in danger of buckling under a mountain of bad banking debts.

The International Monetary Fund is believed to be ready to slash its own forecast of world growth to around 2% next year, reflecting concerns about the state of the economies of developing nations.
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