Asia's industrial and developing economies have shown a resilience in the face of a likely recession in the United States that signals the region's growing independence from the western world, according to the International Monetary Fund's economic forecast Wednesday. ( dpa )
China and India continue to grow well above long-term trends, while Japan's financial institutions and even exports have remained strong despite the financial crisis and wider economic slowdown in the US and Europe, the IMF said in its semi-annual World Economic Outlook report.
World Bank President Robert Zoellick this week said the continued strong performance of Asian and Latin American nations showed that the world was developing "alternative poles of growth" to the United States, which remains the world's largest economy.
Strong domestic demand and greater inter-Asian trade means the impact of US and European troubles has been "less severe than during previous downturns," the IMF said.
Nearly half of Japanese exports now go to emerging Asian economies the IMF said, insulating the island at least partly from weaker demand for its products in the West.
China is forecast to grow at a rate of 9.3 per cent this year and 9.5 per cent in 2009, down from 11.4 per cent in 2007. India's growth rate will be 7.9 per cent in 2008 and 8 per cent the following year, down from 9.2 per cent.
The IMF's chief economist Simon Johnson suggested the Chinese government allow an appreciation of its sharply undervalued currency to prevent a possible overheating of its economy, while still keeping an eye on the dangers from the wider economic slowdown.
Growth across emerging Asian economies was forecast to grow by 7.5 per cent in 2008 and 7.8 per cent in 2009, compared to 9.1 per cent in 2007.
Japan will likely see growth slow to 1.4 per cent on the year and 1.5 per cent in 2009, from 2.1 per cent in 2007, largely on weaker consumer spending and a moderate decline in exports.
But the IMF warned that Asian economies will also have to keep a watchful eye on inflation rates amid a surge in food, energy and metals prices in the past year.
"Policymakers face a difficult task in balancing the trade-offs between growth and inflation," the IMF report said.