AMSTERDAM. Sept 8: The International Monetary Fund has ratcheted up its growth forecasts for the world economy this year and next, as the US economy maintains momentum and key emerging markets perform better than expected, according to a draft of the IMFs World Economic Outlook, says Reuters.

But in the draft document, Bublished in Dutch on the utch finance ministry's website, the IMF warned that there were risks attached to imbalances in the US economy. Timely interest rate increases might be necessary to prevent a hard landing.

The IMF forecast the world economy would expand 2.8 per cent in 1999, compared with the

2 .3 per cent sketched in the previous IMF report in May. In 2000 the global economy would grow 3.4 per cent, instead of 3.3, the IMF said.

The growth forecasts for all nations involved in the Asia crisis have been upped and recessions in Russia and Brazil are less deep than originally expected." it said.

"Growth in Japan and Europe seems to be picking up and the expansion in the United States is continuing, almost without price or wage pressure."

The fund pencilled in 3.7 per cent growth for the United States in 1999 and 2.6 per cent in 2000. compared with 3.0 and 2.2 per cent respectively in its earlier report.

But it said macro-economic

inequalities, including high-priced stocks and the high value of the dollar, could lead to a hard landing.

'To minimise the risks and to avoid overheating timely rate increases are probably necessary," the report said.

It noted signs the Japanese ec -^-mv was piciurT up to a s.>ieli . tent and said domestic policy m-_=t now seek a balance between contradictory long and short-term goals.

"For the Bank of Japan the IMF still sees enough room to give liquidity *o the economy. In terms of structural policy there is a good framework to carry out reform. Now the emphasis is on how it is put into practice," it said.

The fund left its growth fore-

casts for the European Union unchanged at 1.9 per cent in 1999 and 2.7 per cent in 2000. It /Said near term risks were reduced.

It added, however, that most budget policies were not sufficiently ambitious and more efforts should be made to reduce the tax burden and reach a balanced budget or budget surplus by 2002.

1 It saw the Russian economy shrinking two per cent instead of seven per cent this year.

Japan's economy would grow 0.2 per cent in 1999, instead of contracting 1.1 per cent, and post 1.0 per cent growth in 2000^

Brazil’s economy would shrink one per cent instead of 3.7 per cent in 1999 and grow 4.0 per cent in 2000.