This is reflected in the fact that the International Monetary Fund recently raised its growth forecast for the world economy for 1999 and 2000. The US economy, in particular, has remained surprisingly strong, while inflationary pressures have been astonishingly muted, due in part to lower commodity prices and a strong dollar. Signs of recovery can also be seen in Europe and Japan. Finally, within the region, the early signs of recovery have also begun to have a favorable impact on intra-regional trade, indicating that individual countries are pulling one another out of the recession in a mutually beneficial manner. Second stage of recovery more difficult It is not possible, strictly speaking, to identify definite stages in the reform process.
Reforms proceed simultaneously in a number of areas, and hence tend to overlap one another.
Investor panic during the past two years left behind it a legacy of bad debt, and this must be cleared up. Work in this area has just begun. Progress thus far in bank restructuring is encouraging but much more remains to be done. Plans for bank restructuring are well advanced in all of the affected countries. Banks in these countries were either forced to write off NPLs or to sell them to asset management companies.