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To: Lee who wrote (76765)	11/5/1998 3:25:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 176387

Lower Interests will drive a global rebound-Chief Economist GM Lee: Just came across this very interesting article.Since GM is a global company and has a substantial stake in these countries I think knowing the macro economic conditions of these various countries is very important to them and I would think it is their business to know what is going on unlike some of the guys we know sitting around making bold predictions up there in NY on Wall Street so that they can make a couple of quick bucks trading in and out of markets and spooking the 'little guys' out their money .Now this guy I like.<g> Oh the Dina Shore bit,I am familiar with the lady. Government goof up: I heard that,not bad eh? Bridge News Report GM ECONOMIST: LOWER RATES WILL DRIVE A GLOBAL REBOUND New York--Nov 4--General Motors Chief Economist G. Mustafa Mohatarem said today he expected interest rates to fall globally and emerging economies to steer toward recovery heading into 1999. Although he acknowledged that there is a "significant slowdown in Brazil", Mohatarem still predicted a rebound for Thailand and Korea early next year, and solid growth in the U.S. and Mexico -- all factors that would contribute to a stronger-than-expected world auto market. "I don't agree with the basic presumption that all emerging markets will be in recession. Fundamentally, that's yesterday's story," Mohatarem said in an interview with Bridge News. "I think the story you'll be hearing more and more about is the recovery." Specifically, Mohatarem predicted that economies in Thailand and South Korea would experience a turnaround sometime between the first and second quarters of 1999. The economist also said he expected GDP growth of 4% to 5% for Mexico in 1999, and 2.5% to 3.0% for the U.S. over the same period. "What we're seeing is an across-the-board -- almost global -- drop in interest rates for '99, and it doesn't matter whether it's an emerging country or an industrial country," Mohatarem said. "We're looking for a fairly strong auto market." According to the economist, U.S. vehicle sales will near a peak this year at just above 15.7 million vehicles, growing about 1% in unit terms and 2% to 2.5% in revenue terms. Meanwhile, Mexican vehicle production has surged from around 500,000 units in 1997 to an expected 650,000 this year. Assuming no catastrophic regional meltdown, Mohatarem said the Mexican market could grow a further 10% in unit terms in 1999. While acknowledging the problems in Brazil, where interest rates are currently around 40%, Mohatarem said those rates could fall sharply with the announcement of an international aid package and the implementation of recently proposed fiscal adjustments. The economist was fairly optimistic Brazil's Congress would pass the necessary measures. "At this point, I don't see what choice Brazil has," he remarked. Mohatarem praised Latin America's economic fundamentals, and said countries like Argentina and Mexico were already benefiting from last week's announcement by the G7 to extend funds to countries pursuing sound economic policies before they reached a state of emergency. "[We're looking for] a growing recognition that the crisis is over," Mohatarem said, and then added that recovery may also be faster than anticipated. "Capital flows in almost as fast as it flows out," he said. source:By Joshua Chaffin, Bridge News via Business week