IMF: Sharp slowdown in Asian economic growth in 2009
Economic growth in Asia is expected to slow sharply into 2009 as the global financial crisis clamps down demand for exports and the turmoil hits domestic activity, the International Monetary Fund (IMF) said Monday, reported dpa.
Growth is forecast to slow to 6 per cent this year from 7.5 per cent in 2007, the IMF's November regional economic outlook for Asia said.
Recovery could begin in late 2009, when overall growth is pegged to fall to 4.9 per cent, the IMF said. However significant downside risks remain, including the possibility of a severe global recession and a deeper-than-expected credit crunch.
"With the recent financial turmoil, any hopes that Asia would escape the crisis unscathed have evaporated," said Jerald Schiff, senior advisor for the IMF's Asia Pacific Department.
Any growth will come from domestic demand as the economic downturn in North America and Europe will result in a decline in demand for exports from Asia. But demand within Asia will also slow, the IMF said.
Inflation is predicted to slow, with possible deflationary pressure from falling commodity prices.
The IMF recommends Asian governments implement policies to safeguard financial systems and credit access, ease monetary policy and provide additional fiscal stimulus.