Asia resilient, has room for stimulus -IMF
Asian economies remain “generally resilient” in the face of global f i n a n c i a l t u r moil a n d a g r owi n g d e b t c r i s i s i n t h e e u r o z o n e, t h e IMF’S top of ficial for Asia and the Pacific said on recently.
The IMF was concer ned with possible spillover ef fects from the euro z o n e b u t As i a n e c o n o mi e s h ave room to take defensive fiscal measures if necessary, IMF Director for Asia and the Pacific re gion, Anoop Singh, told a news conference.
“In the event of a fur ther slowd own i n t he g l o b a l e c o nomy, o ur s e n s e i s t h a t most e c o n o mie s i n Asia have room for a strong policy response,” Singh said, in an updated outlook for Asia.
“Certainly, if these severe downs i d e r i s k s mat e r i a l i z e , a n o t h e r round of fiscal stimulus could be taken,” he added, including through measures to bolster social programs for the poorest, increasing consumption and investments.
Last week, the IMF cut its outlook for the world economy to 3.3 percent in 2012, down from a prior estimate of 4 percent. It projected g rowth of 3.9 percent in 2013.
For Asia and the Pacific region, the IMF forecast g rowth in 2012 would come close to 6 percent, recovering to 6.5 percent next year - the fastest growing region in the world.
Singh said strong domestic demand was allowing Asian economies to “hold fir m” in the f ace of tur moil in Europe.
The IMF has forecast that China’s e c o n o my wi l l e x p a n d i n a r a n g e between 8 percent to 8.5 percent this year, increasing to 9 percent by 2013. In India growth will remain around 7 perc e nt t hi s year, e dgi ng above that number next year.
Singh said Asian banks have so f ar used their healthy finances to ste p in and ensure a flow of credit a nd t r a d e f i nance, i n t he f a c e o f g radual deleveraging by European banks.
“I t i s not s ur pri s i ng, t herefore, that the pace of macro-policy tightening has generally paused, in some cases it has been reversed,” Singh said, adding that inflation was projected to recede further during 2012.
“C h i n a c a n m o v e aw a y from i t s r e l i a n c e o n e x t e r n a l d e mand a n d n e e d s t o b u i l d u p d o mes t i c demand,” said Singh, adding that China was working on measures to stimulate demand.
“We d o n’ t s e e ( a ) hard l a ndi ng risk as likely,” Singh added, noting proper t y pr i c e s were moderating and sales volumes declining.
(Reuters)