To: John Hauser who wrote (119229 ) 4/20/1999 11:32:00 AM From: Mohan Marette Read Replies (2) | Respond to of 176387
The worst is over for ASIA-says IMF--->Yahoooooooooo. Tuesday April 20, 11:04 am Eastern TimeIMF says worst over for Asia, seeks changes By Mark Egan WASHINGTON, April 20 (Reuters) - The worst is over for Asia's hard-hit economies amid signs of growth in South Korea and stabilization in Thailand, the International Monetary Fund said on Tuesday. The IMF's semi-annual World Economic Outlook, reviewing the prospects for its Asian patients, said Indonesia should return to growth late in 1999 after political and social unrest slowed its economic progress. Malaysia would grow modestly this year after a painful recession in 1998. ''The economies in Asia that suffered the first wave of the recent emerging market crisis seem close to the bottom of their economic slumps,'' the report said. It also said the Asian economies need to do more on structural reforms, particularly on restructuring banks and companies, to ensure their growth continues. The IMF put together international rescue packages worth well over $100 billion for the three one-time Asian tiger economies, Thailand, Indonesia and South Korea, making payments from the loans conditional on tough economic reform programs. All three countries fell into recession in 1998, but the IMF figures pointed to growth for two of the three this year.The IMF forecast the South Korean economy would grow 2.0 percent this year and 4.6 percent in 2000, reversing last year's 5.5 percent decline. Thailand's economy should grow 1 percent this year and 3 percent in 2000 after a steep decline of 8 percent in 1998. It said Indonesia, where output fell 13.7 percent in 1998, would continue to decline economically with output falling 4 percent this year. But output should start to turn around in the latter part of the year and would rise 2.5 percent in 2000. The report said the restructuring of South Korea's banks was making progress but more work needs to be done on restructuring conglomerates which need exposure to market discipline without the help of government favors. It said the Thai economy has stabilized, helped by a firmer currency which allowed interest rates to decline to well below pre-crisis levels. The report said Thailand's yet-to-recover credit growth depends on progress in recapitalizing banks as well as restructuring companies -- a process which should be helped by recent legislation on bankruptcy and foreclosure proceedings.Malaysia is expected to grow 0.9 percent this year and 2 percent in 2000. But the IMF said private sector investment will likely remain inhibited by banking and corporate restructuring as well as by uncertainties about Malaysia's capital controls. Malaysia, a fierce critic of the IMF, responded to the Asian financial crisis with tough capital controls.The Philippines, which escaped the worst of the crisis, should record 2 percent growth in 1999, rising to 3 percent in 2000, the IMF said. It said Manila should have room to lower interest rates further this year as inflation eases. --------------------------------------------------------------------------------