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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (1356)	2/25/1999 8:32:00 PM
From: porcupine --''''>	Respond to of 1722

IMF says worst over in world economic crisis WASHINGTON, Feb 24 (Reuters) - The worst of the world economic crisis now seems to be over and the South Korean economy will grow a steeper-than-expected 2 percent this year, the head of the International Monetary Fund said on Wednesday. IMF Managing Director Michel Camdessus, in remarks prepared for delivery at the Foreign Policy Association in New York, said IMF sponsored reform programs in Asia and elsewhere were starting to work. The IMF released the text of his remarks in Washington. "There are positive indications that, while the risks are still with us, the worst seems to be past, at a great cost, certainly, but thanks also to tremendous efforts and courageous programs of reform," Camdessus said. "These programs are bearing fruit even if each country still faces the continuing challenges of pursuing deep structural reform. It is very clear that Thailand and Korea are emerging from crisis." The IMF has already handed out billions of dollars in loans to try to resolve a financial crisis which started in Thailand in July 1997 and spread relentlessly around the globe. IMF experts are currently renegotiating their November 1998 $41.5 billion rescue deal with Brazil, the world's eighth largest economy, to take account of changed circumstances since the government devalued its currency, the real. "Brazil is strengthening its post-float economic policy framework and I am confident that you will soon hear some good news about it," Camdessus said. Camdessus, admitting that over-pessimistic forecasts had been a recent IMF mistake, said the IMF had already revised its December 1998 forecasts for South Korea and the IMF now expected the economy to grow by around 2 percent. The December forecast had envisaged a 1 percent decline in output. "The program worked so well that we have already had to correct our forecast," he said. "Now we see Korea expanding by 2 percent in 1999, that is 3 percentage points faster than we thought in December. Another mistake!" The IMF has faced bitter criticism for its recommendations to the countries caught up in the financial crisis. Some critics said IMF proposals of high interest rates to defend ailing currencies were driving countries into deep recession, while others said the large sums of IMF-sponsored rescue deals encouraged countries or investors to act irresponsibly because they knew the IMF would bail them out. ((Janet Guttsman, Washington newsroom, +1 202 898 8309 washington.economic.newsroom@reuters.com))