IMF managing director Michel Camdessus predicted world growth of around 2.5 per cent for 1999, creeping up from the recently revised-down figure for this year of 2 per cent.

Camdessus was in the Spanish capital to attend the fourth meeting of the so-called Montevideo Circle, an informal gathering of top-ranking politicians and officials who annually hold a behind-closed-door brainstorming session on Latin American issues.

The IMF chief told reporters that Europe and the United States, ``the two motors of the world economy,'' were still going strong, despite some slowdown in America and Great Britain.

He said Asia should be able to keep its economic head just above water, avoiding negative growth next year.

Camdessus said the immediate task was to ensure that Latin America weathered the financialstorm that began in Thailand 15 months ago before spreading from Asia to precipitate Russia's recent collapse.

``It is a vital obligation to prevent the Latin domino from falling,'' Camdessus said, praising Spain's recent offer to help fund emergency credits to the region under threat from investor flight.

He said he hoped other European countries with business interests in Latin America such as Italy, France and Germany would follow the Spanish example.

The IMF and the Brazilian government are putting the final touches to an emergency three-year package that should be ratified within weeks, Camdessus said. The package has been estimated to total $30 billion.

``Brazil will not collapse,'' he said, adding that Argentina and Chile were among the keenest to see the IMF reach agreement with their giant neighbour.

Less upbeat about Russia, Camdessus said the fund was still working toward a financing package, but that the government still lacked a programme. This, he said, would take time, and appealed togovernments to provide humanitarian aid in the interim.

The IMF has put together bailout packages totaling over $100 billion during what Camdessus called ``the most uncertain year ever.''

he said the crisis has underlined the need for prevention, and the transformation of the fund's primary role away from that of ``the firefighter who arrives when the fire is already burning.''

Greater private sector involvement in the prevention and resolution of future economic crisis would help, Camdessus said.

``Now, the private sector tends to run away and leave the work to the governments,'' he said.

Camdessus also said he was aware of recent criticism of excessive IMF secrecy, but he said his own efforts to open up the fund have been blocked by governments demanding discretion.

Camdessus said that those who viewed the crisis as a critique of the fund's promotion of world economic liberalisation were mistaken. The man who has headed the IMF for 12 years said that it simply demonstrated the need to carrythrough liberalisation programmes properly.