The ongoing Asian financial firestorm will affect virtually the entire world in 1998, according to projections issued by the International Monetary Fund (IMF).
The report predicts slowing economic growth and rising unemployment and trade deficits. The biggest risk for industrial nations, the IMF said, is decreasing consumer confidence caused by ongoing turmoil in financial markets. As if to underscore this prediction, world stock markets gyrated wildly as 1997 drew to a close and 1998 began.
The United States, it warns, is in danger of exploding trade deficits, estimated to increase by 29 percent to some $230 billion as currency devaluations lower the costs of imported Asian goods and slow U.S. exports.
Just before the Asian financial crisis began, the IMF had predicted worldwide economic growth of 4.3 percent. Just two months later, as Asia's dilemma deepened, the IMF lowered its projected increase to 3.5 percent, the lowest increase in five years.
"The repercussions in regional and global financial markets ... have proven much deeper and more extensive than seemed likely only a few months ago," said the report. "The economic implications can now be expected to be more serious." (Source: The Associated Press.)
