International Monetary Fund lending could worsen the crisis in many countries, an independent think tank said on Tuesday in a report which the IMF dismissed as ‘seriously misleading.’ The Centre for Economic and Policy Research said that the IMF was promoting spending cuts that could exacerbate the economic downturn in 31 out of the 41 countries with current IMF loan agreements.

‘More than a decade after the Asian economic crisis brought world attention to major IMF policy mistakes, the IMF is still making similar mistakes in many countries,’ Mark Weisbrot, an economist at CEPR, said in a statement. ‘The IMF supports fiscal stimulus and expansionary policies in the rich countries, but has a much different attitude toward low-and-middle income countries,’ he said.

The report called for the IMF to ‘re-examine criteria, assumptions and economic analysis that it uses to prescribe macroeconomic policies in developing countries.’ IMF spokesman Bill Murray dismissed the report’s findings. CEPR ‘reaches seriously misleading conclusions about the pro-cyclicality of policies in IMF-supported programs, relying on faulty analysis and often inaccurate information,’ he said. ‘The main point of this report is that growth forecasts were too optimistic when programs were designed, leading to excessively tight fiscal and monetary policies. Reality is quite the opposite,’ he added.

-New Age