OREANDA-NEWS. April 23, 2008. The Baltics should see a soft landing from the global economic slowdown, but there is still some risk of a hard landing there and in Romania and Bulgaria, the International Monetary Fund (IMF) said.

Ajai Chopra, deputy director of the IMF"s European Department, also said euro zone aspirant Slovakia had made good progress on inflation - its toughest challenge for adopting the currency - but would need tight fiscal and wage moderation to keep it on track.

"Our basic scenario for the Baltics is a soft landing," Chopra said at a conference in Warsaw. But he added: "The risk of a hard landing cannot be excluded, not just in the Baltics but in Romania and Bulgaria too."

He said the risks in emerging Europe were external and particularly acute for countries with high external imbalances and governments should rein in demand with budget tools.

"Widening current account deficits are part of convergence ... But some current account gaps should be flashing red for policymakers," he said. "Fiscal policy should be used more to tackle demand."