IMF says supports rescue of Fannie, Freddie

WASHINGTON (Reuters) - Measures to rescue Fannie Mae and Freddie Mac "are going in the right direction", the International Monetary Fund said on Thursday, as lawmakers consider legislation to backstop the troubled mortgage finance giants.

"The announced measures on Fannie and Freddie are going in the right direction and are consistent with approaches that the fund has supported," IMF spokesman David Hawley told a regular briefing for reporters.

"We agree that public-sector intervention is warranted, accompanied by improved supervision," he added.

Hawley said while the IMF did not comment on individual institutions, it had become more pessimistic on the outlook for U.S. economic growth because of developments in the housing sector.

"We have been saying the U.S. housing sector has had a decisive influence on developments in the rest of the economy and that is why we are being more pessimistic on the U.S. outlook," he added.

On July 17, the IMF revised upward its growth projections for the United States to 1.3 percent in 2008, rather than 0.5 percent estimated in April. It said 2009 growth would be 0.8 percent instead of 0.6 percent.

But it also cautioned at the same time that the effects of the U.S. subprime lending crisis was still filtering through the financial system, at a slower rate than previously expected.

(Reporting by Lesley Wroughton; Editing by Jonathan Oatis)