Asia's Economic Crisis Will Slow World Growth, Says IMF
Carlin, John, The Independent (London, England)
THE International Monetary Fund forecast yesterday that world growth would slow to 3.1 per cent this year, down from 4.1 per cent in 1997, as Asia's economic flu spreads its contagion around the globe.
But, according to the IMF's World Economic Outlook report released yesterday in Washington, growth would recover to 3.7 per cent in 1999, .
The report, a diagnosis of the economic health of IMF member states, painted a largely rosy panorama for all parts of the world with the exception of Asia. Among the major industrialised nations it is Japan's outlook that is by far the gloomiest. "Risks are about evenly balanced around the world growth forecast," IMF chief economist Michael Mussa told a news conference yesterday. "We may have upside potential for North America and Continental Europe, but there is some downside risk in Asia and a number of other developing countries heavily dependant on commodity exports." The IMF report said that Japan would be hit more strongly by Asia's economic turmoil than any other G-7 nation because of its high lending levels to the region and its tight trade links. Mr Mussa said the IMF expected zero growth in Japan this year, but added that could be optimistic. ""Zero could be hard to achieve," he said. "It looks as if during the first half of this year we are looking at GDP heading down . …