23 January 2018
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  • » 07/08/2010, 00.00


    IMF predicts faster recovery, but dangers lurk around the corner

    Forecasts for this year are revised upward thanks to Asia, which is even better placed to resist the effects of Europe’s sagging economies. Some experts warn however, that neatly worked-out estimates can mask a situation characterised by structural problems in a number of countries.
    Beijing (AsiaNews/Agencies) – The world economy is set to expand by 4.6 per cent this year, higher than the 4.2 per cent projected in April, the International Monetary Fund (IMF) announced today. A higher GDP growth rate for Asia (7.5 per cent from 7.0 per cent in April) is the main explanation for this rosier scenario. Economies in the euro zone remain however on a sick list for possible setbacks. Experts are puzzled though by the higher-than-expected growth rates in some of the faster economies because they contradict previous forecasts.

    China’s economy is expected to grow by 10.5 per cent following a strong rebound in exports and resilient domestic demand, the IMF said, up from 10.0 per cent in the April forecast.

    India's growth was also revised higher to 9.4 per cent from 8.8 per cent as robust corporate profits and favourable financing conditions fuel investment.

    Even next year, when stimulus packages are expected to end in several countries, Asia's GDP growth is expected to settle to “a more moderate but also more sustainable rate” of 6.8 per cent, with China’s growth slowing to about 9.6 per cent and India's settling at 8.4 per cent, the IMF said in its report.

    In Japan, growth was now expected to reach 2.4 per cent this year, due mainly to stronger-than-expected exports.

    The five key Southeast Asian economies of Indonesia, Malaysia, the Philippines, Thailand and Vietnam were expected to grow by an average 6.4 per cent this year and 5.5 per cent next year.

    The IMF warned however that if the crisis in Europe continues or gets worse, the export-oriented economies of Asia are bound to suffer.

    More significantly, some analysts are not convinced by IMF projections given recent announcements and the daily experience in the economies with higher-than-usual growth.

    In China, for example, where the government has taken steps to dampen rising housing prices, the real estate market is already cooling and this already slowing down overall economic growth.

    Local experts told AsiaNews that the entire economy has felt the repercussions of a flatter real estate market right away as the number of housing starts levelled off, and demand for construction material like iron and steel declined.

    As the yuan appreciates, albeit slowly, Chinese goods will get more expensive, with negative consequences for Chinese manufacturers. All this will come inevitably at a price in terms of domestic wealth and personal consumption, all the more so if we consider that China’s safety net is quite thin.

    With manufacturing slowing down, unemployment will rise, reducing personal purchasing power as well as public spending, in what might become a vicious downward cycle.

    This explains why China's central government said it was going to invest more than US$ 100 billion in 23 new infrastructure projects (railways, roads, airports, coal mines, nuclear power stations and power grids) in the underdeveloped western regions of the country (Xinjiang, Inner Mongolia, Tibet, Sichuan and Yunnan), aiming to boost domestic demand.

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    See also

    09/12/2008 ASIA
    Economic crisis: US, China and the coming monetary storm
    The massive levels reached by the foreign debt of the United States and the excessive and unjustified devaluation of China’s yuan are two high risk factors for the world economy and stability. Solutions found so far may be useful for financial institutions but not for the population. A “transnational” oligarchy is emerging that includes central banks, the Chinese Communist Party, Russia’s oligarchies and oil sheiks.

    06/05/2009 ASIA
    A “long and severe recession” for Asia? Perhaps not
    For the International Monetary Fund the current crisis is worst than thought and will last longer than expected. Japan’s economy is set to shrink by 6.2 per cent in 2009. Financial managers are less pessimistic; for them large scale foreign investments are a sign that the recovery is underway.

    14/04/2008 ASIA
    100 million at risk of poverty: danger of famine and war in poor countries
    The World Bank and the International Monetary Fund raise the alarm: the rise in food prices is reducing entire populations to hunger. Without immediate aid, there are risks of public protests and armed conflict. Over the long term, help must be given to small farmers.

    25/05/2010 AZERBAIJAN
    Economic crisis could trigger recession in Azerbaijan
    The International Monetary Fund issues the dire warning. The country’s economy is almost entirely dependent on energy exports. Without diversification, it could plunge in recession next year. International assistance is crucial.

    23/03/2009 TURKMENISTAN
    Global crisis could further increase poverty in Turkmenistan, World Bank reports
    According to the World Bank, Turkmenistan’s economy might even shrink. The International Monetary Fund expects growth in Central Asia to be less than 2 per cent. Just last week however Turkmen President Berdymukhammedov announced 10.7 per cent growth for this year.

    Editor's choices

    The Vatican asks legitimate bishops to step aside in favour of illegitimate ones

    John Baptist Lin

    Last December, Mgr Peter Zhuang Jianjian of Shantou (Guangdong) was forced to go to Beijing where "a foreign prelate" from the Vatican asked him to leave his see to illicit bishop Joseph Huang Bingzhang. He had received the same request last October. Mgr Joseph Guo Xijin, ordinary bishop of Mindong, is expected to become the auxiliary or coadjutor of illicit Bishop Vincent Zhan Silu. Sinicizing the Chinese Church means supporting the principle of independence and follow the leadership of the Communist Party.

    Pope in Peru: Young people, the heart can’t be “photoshopped”, because that’s where real love is found

    At the Angelus in the Plaza de Armas, Pope Francis calls on young people to follow Jesus with all of themselves, without discouragement, in the example of St. Martin of Porres, the half-caste saint. Silent prayer for peace in the Republic of the Congo. To the bishops, the example of St. Turibius of Mogrovejo, an indefatigable evangelizer: "Today we would call him a 'street bishop'". To the contemplative religious the invitation to pray for the unity of the Peruvian Church.


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