Kunio Saito, director of the International Monetary Fund's office for Asia and Pacific, warned governments against complacency on structural reforms as their economies gathered momentum."So far, so good. The downside risk in my view is complacency, particularly with regard to structural reforms," he said.

The IMF put together recovery packages for three one-time Asian tiger economies --Indonesia, Thailand and South Korea -- after the region's crippling financial crisis in mid-1997.

"A lot of progress has been made in Korea, Thailand and even in Indonesia but reforms by no means are complete. Efforts must be continued as economic recovery proceeds," Saito said. He said that growth in Asia also hinged on the fortunes of the US and Japanese economies. Saito, in Malaysia's capital to address a seminar on regional capital mobility, said Japan would register a positive growth in 2000, helped by a pick-up in corporate investment and a budgetary stimulus.

"Basically, the problem the Japanese economy is facing right now is weak consumption whereas investment in the corporate sector seems to be picking up," he said. "I understand the government is willing for another supplementary budget and that will give another stimulus later in the year. Combining all these elements I think the Japanese economy will register a positive growth this year".

The Economic Planning Agency (EPA) said earlier in June that January-March GDP spurted ahead 2.4 percent from the previous quarter - a 10 percent annual growth rate for the three-month period and the best quarter in four years.Asked whether he was satisfied with the pace of financial reforms in Japan, Saito said: "Of course, one can wish for more but with Japanese speed which is a little slower than Malaysia and definitely than Korea, I think reform is proceeding." Saito said Malaysia, which took an unorthodox route imposing capital controls to protect its economy, was doing very well.

-- (Reuters)