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ASIA RECOVERING RAPIDLY, BUT FACES CHALLENGES, SAYS IMF

IMF, October 29, 2009

- Rapid recovery, with growth forecast of 5¾ percent in 2010
- Need for continued stimulus until recovery entrenched
- Shift growth towards domestic demand, says IMF

After being hit hard by the global economic slump, Asia is now rebounding fast, according to the IMF in its Regional Economic Outlook for the Asia and Pacific Region.

The report says the region is outpacing other parts of the world, with the “green shoots” of recovery appearing earlier and taking firmer root than elsewhere.

However Asia’s outlook remains closely tied to the global economy and the key behind Asia’s recovery was bounce back from the sudden stop in global trade and finance at the end-2008. This has fuelled a rapid recovery in exports, boosting industrial production and overall GDP, says the report.

“Asian economies have been very strong in their stimulus from both monetary and fiscal sources,” said Anoop Singh, Director of the IMF’s Asia and Pacific Department.

In the wake of the global downturn, Asian authorities swiftly deployed packages to boost government spending, reduce interest rates, and stabilize financial markets. These measures were much larger than in previous crises, and in the case of the fiscal programs even larger, on average, than those introduced by the Group of 20 industrialized and emerging market countries.

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