Asia Crisis Seen Cutting World Growth 1%

The German economics institute Ifo expects the Asian financial crisis to reduce world economic growth by 1% in 1998. In a report due to be published today, Ifo said 420 experts from 66 countries it had surveyed expected global growth of 2.5% this year. Germany, France and Italy should expect an acceleration of their economic growth in the coming months, and the U.S. dollar is likely to remain strong, Ifo said. Economic growth in Western Europe and North America is likely to reach 2.6% and Eastern Europe and Latin America are likely to have growth rates of 3.9% and 3.7%, respectively, this year. In Asia, growth will slow to 1.9% in 1998, although Ifo expects China to grow 7%. Hong Kong and Singapore are also expected to grow more than 3%.