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Tue, Sep 29, 2009 - Page 10 News List

IMF loan recipients face slow recovery amid major risks

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The IMF said that as many as 20 countries getting loan support from the Washington-based lender would probably face a slow economic recovery as fiscal challenges arise in the years ahead.

The IMF, which has rescued economies from Pakistan to Iceland since the start of the global financial crisis, said in a report on Sunday that while there were signs of stabilization in troubled countries, many loan recipients may need assistance beyond their current arrangements. The fund singled out Latvia, Iceland and Ukraine as facing the greatest difficulties.

“The recovery in program countries is projected to be slow, with large downside risks,” the report said. “Most countries are expected to face significant fiscal challenges in the coming years.”

The IMF is advising officials around the world not to withdraw economic stimulus programs too soon as they chart a path to sustainable growth. The mixed economic environment and rising unemployment are leaving the G20 industrial and emerging nations with no option but to maintain support of banks and fiscal stimulus, totaling more than US$2 trillion, even as their debt mounts.

The fund said in the report that it has committed US$75 billion to emerging nations since September last year. Countries receiving assistance range from Hungary to Mongolia. The IMF, in a review of its loan accords, said in the report that its intervention since the collapse of Lehman Brothers Holdings Inc a year ago has helped prevent a deeper upheaval.

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