International economic and financial conditions have deteriorated considerably in recent months as recession has deepened in many Asian emerging market economies, IMF said.

At the same time, it warned against any reversal of reforms in emerging economies in Asia as it would put the clock back on their growth and ability to attract foreign investments.

In its semi-annual World Economic Outlook (WEO) released here IMF said though effects of Asian crisis have been limited in America and Europe till now, the spill overs are presently being felt in the industry sector of these nations.

The Asian currency crisis which affected the economies of Japan and Russia have raised the specter of default and a world growth of onlytwo per cent is projected during the current year, compared to three per cent anticipated earlier, the IMF said in its report.

Stating that Russia's unilateral debt restructuring and ensuing intensification of contagion, the WEO said that the crisis have extended to most of the emerging market economies and stock markets globally.