"I had thought until recently that the concern about complacency was being overdone," Stanley Fischer, the first deputy managing director of the IMF, told a luncheon at the World Economic Forum in Singapore.

"But unfortunately it is not, and the risk that the strengthening recovery will reduce the urgency of reform, and allow a business-as-usual attitude to set in is very real." He said while Asia was set to achieve a growth of 4.1 per cent this year, compared with 2.7 per cent expected only six months ago, it needed structural reforms, not only in the crisis-struck countries, but also in China, India, Japan and many others.

"This crisis has sent an important warning. It would be a nonforgivable mistake, one with great costs to many who have already paid a high price, to ignore its lessons," Fischer said.Referring to Japan, which he said was absolutely critical for Asian recovery, Fischer also urged the central bank to purchase assets, which should increase liquidity and thereby reduce long-term rates and the value of the yen.

"The recent rise in the yen has made clear the need for a more expansionary stance (in Japan). With interest rates at zero, there is the question of what more the central bank can do," he said. "Purchases of assets will increase liquidity."

IMF assessing Pakistan situation

Meanwhile, IMF is still assessing the situation in Pakistan after a military coup there and will not resume funding to the country for the time being, a senior IMF official said on Monday.

"We are very concerned about the restoration of democracy in Pakistan and we are waiting to see what happens before we could possibly get back into dialogue with Pakistan on what they would propose to do to deal with their very severe economic problems," Stanley Fischer, the IMF's first deputy managing director, told reporters at a World Economic Forum meeting in Singapore.

Pakistan's General Pervez Musharraff led a bloodless coupon Tuesday, overthrowing the 30-month-old government of Prime Minister Nawaz Sharif.

Musharraff pledged at the weekend to restore a democratic government to the deeply indebted country but gave no timetable.

Fischer said the executive board of the multi-lateral agency had to decide whether Pakistan's economic and political situation would justify the IMF resuming economic relations and assistance.

The IMF had not completed its loan disbursement to Pakistan before the coup.

"The programme we had with Pakistan before was one which took a great deal of time to negotiate," Fischer told reporters.

"The economy was basically on track but not all the policy measures we had agreed on were implemented, so we were somewhere in a phase of not quite being on the disbursal of the next tranche anyway," he said.

"Even if we had been, circumstances have changed so much,that we are simply going to have to wait to re-assess the situation," Fischer added.