The head of the International Monetary Fund (IMF) Dominique Strauss-Kahn apologized today for faulty figures published by his organization, which had inflated the risk for Central and Eastern European economies, dpa reported. At a Vienna conference sponsored by Austria's national bank, the IMF's managing director also said he expected the global economy to recover in the first half of 2010, Austrian news agency APA reported. However, Strauss-Kahn insisted the basic analysis was still valid that there was an increased risk in emerging markets, including those of Eastern Europe. In its Global Financial Stability Report for 2009, the fund miscalculated indicators for over-indebtedness. For the Czech Republic, the IMF initially came up with a ratio of 236 per cent, indicating foreign debt was over three and a half times as large as currency reserves. The figure has been corrected to 89 per cent. Likewise, Estonia's ratio had to be reduced from 210 to 132 per cent, while Ukraine's was lowered from 208 to 116 per cent. Last October, the IMF stepped in to bail out Hungary, and it is helping other countries in the region, including Poland and Latvia. Although there had been a lack of international coordination in the initial period of the financial crisis, there were now positive developments such as globally agreed fiscal stimulus packages. "We also saw some recent agreements brokered here in Vienna with banks agreeing to keep supporting subsidiaries in Eastern Europe," Strauss-Kahn said. "I think this all augurs well for the future." However, an economic upturn depends on banks cleaning up their balance sheets, according to the IMF chief.
