Europe taking good steps - IMF chief

Measures announced by European countries to tackle their fiscal woes are helpful steps, IMF chief Dominique Strauss-Kahn said on Thursday, adding that Europe's economy will be back on track soon.

Strauss-Kahn, who spoke after meeting with Peruvian President Alan Garcia, said the International Monetary Fund believes that Greece and Spain are making the right moves to tackle their economic problems, which have rattled global financial markets for weeks.

"Those countries in Europe having a fiscal problem are addressing this problem these days, along the measures that have been announced, and I do believe that they are going in the right direction," the IMF's managing director told a media conference in Lima.

"I think that we've got good reason to believe that everything will come back on track rather rapidly," he added.

Strauss-Kahn also said the U.S. economy should grow about 3 percent this year. Europe may post growth of between 1 percent and 1.5 percent, he said.

He told students at a Peruvian university that Europe faces problems of high debt loads and slow economic growth and mending the global economy depends on continued policy coordination by governments.

He said much of Asia and Latin America were growing well and had largely moved past the crisis, but advanced economies were still lagging a bit.

The French economist also said Peru's economy should expand between 5 and 7 percent this year, a forecast that could make it the fastest growing in Latin America.

But he said hard-charging Latin American economies like those of Peru and Brazil face risks from enormous capital inflows that could cause asset bubbles or overheating.

Doubts remain about a fragile global economic recovery and investors are pouring money into emerging economies as they look for yield outside of traditional markets, he said.