STIMULUS PACKAGES HELP STRENGTHEN CONFIDENCE, SAYS EX-IMF ECONOMIST

KUALA LUMPUR, July 21 (Bernama) -- Stimulus packages adopted around the
world have been very helpful in strengthening confidence, said former
International Monetary Fund (IMF) chief economist Kenneth Rogoff Monday.

He said the stimulus packages were introduced at the right time when the
world was facing "something dangerous" and that "it is worth paying the price".

"We have to be realistic about how governments are going to manage this," he
told reporters before a half-day seminar on the Global Economy in the Aftermath
of the Financial Crisis here.

Rogoff who is an economics professor at Harvard University, said some
countries would be facing very significant problems paying for the stimulus
packages.

"In the wake of a typical financial crisis, their public debts will be
almost double within three years and in real term. Malaysia, by the way, was
less than that after the financial crisis.

"We have it seen all over the world, and and then you have to ask yourself
what's the fallout -- are interest rates going to stay low with everybody trying
to borrow money at the same time?" he said.

Rogoff said a lot of people in most countries were extremely happy with the
stimulus packages.

"They (the stimulus packages) are like a set of fine dinner; we are very
happy with the meal and don't realise that they are going to pay the bill at the
end of the meal. They haven't been told about that," he said.

He also said that the global growth for 2010 was expected to be lower at
around 3.75 percent.

"I think, in the wake of this crisis, we will be lucky to have four percent.
We will have a good rebound next year led by the emerging markets.

"I think China will keep its growth for next year but in the longer term, it
will slow down dramatically because it is not in a sustainable trajectory," he
said.
-- BERNAMA