SINGAPORE, May 4: The International Monetary Fund (IMF) has warned against complacency over reforms in crisishit Asia, and a fallout from pessimism over economic growth in Japan and hotly-contested elections in Indonesia, reports AFP.

IMF Deputy Managing Director Stanley Fischer, speaking to journalists here and in Hong Kong via video link from Washington late Monday, said a two-month-old optimism surrounding the global economy was "fragile" and countries had to be mindful of risks on the horizon.

"One is that structural reform in the financial and corporate sectors getting underway

in Korea and Thailand could falter as a result of the lifting of the sense of crisis, a complacency about the crisis. It is a very real concern," he said.

There are "solid grounds" for believing the Japanese economy would recover this year on the back of strong measures taken to restructure its banking sector last year, but skepticism abounded, he said.

But "the other concern was the contrast between the feeling of Japan and the performance in the fourth quarter, where growth was less than expected could be resolved in the wrong direction, mainly a pessimistic direction." he said.

Japan's economy shrank 2.8 per cent in 1998. its worst con-

traction since World War II, and it recorded a contraction of 0.8 per cent in the three months to December.

On Monday. US President Bill Clinton urged visiting Japanese Prime Minister Keizo Obuchi to "use all available tools" to pull Japan out of recession. as Obuchi insisted a major turnaround was imminent.

The call was similar to the one made by the IMF's policy-making committee in its semiannual meeting in Washington a week ago.

But the Japanese premier dismissed the view that Tokyo would need additional spending because measures taken so far could run out of steam later this year.

Fischer called for improvements in the transparency of Japanese fiscal policy which could help outsiders understand measures Tokyo is taking to revive its economy.

"You know and we know if the security situation deteriorates. if the government that eventually takes office is very weak, it could be that the policies that are now being put in place would be abandoned." he said.

The IMF was working with Jakarta to ensure that the Indonesian economy was improving before the elections to avoid the riots that ensued prior to and following the fall of former strongman Suharto last year.