IMF Reports Robust Growth in Developing Nations’ Output

Output in the world’s developing economies grew 6% in 1995 and is expected to keep growing at that pace during the next two years, the International Monetary Fund’s World Economic Outlook Report said.

Disciplined fiscal policies and large capital inflows, usually in the form of foreign direct investment, helped support robust growth rates, the IMF report said.

“The role of domestic policies in fostering conditions conducive to rapid growth in the successful developing countries carries important lessons for those countries . . . which continue to fall behind in relative income positions,” the report said.

Last year’s robust growth in output continues a trend of expansion in developing countries this decade.

While price indicators suggest inflation isn’t overheating, the combination of widening deficits and rapid growth could drive up demand, the report said. Keeping that demand from pushing prices higher will be one of the most pertinent issues in the years ahead.

Growth in developing countries remained strong, despite a slowdown in Latin America, the report said.

Many Latin American economies suffered in the wake of Mexico’s financial crisis, which started with its currency devaluation in December 1994.

The IMF sees about 3.5% growth in Mexico in 1996.