IMF calls on Asia to prepare to tighten policies

The IMF said on Friday Asia should be ready to tighten monetary policies if overheating pressures emerge, while remaining alert to any future shocks from a still volatile global climate.

The International Monetary Fund said in its World Economic Outlook report earlier this month that Asia's growth prospects had dimmed but the region would avoid a hard landing this year thanks to strong domestic demand and monetary flexibility.

Regional growth would flatten out at six percent this year, from 5.9 percent in 2011, before reviving to 6.5 percent in 2013, it said, still much ahead of growth rates in the advanced economies.

But Anoop Singh, director of the IMF's Asia Pacific department, warned on Friday that export-dependent Asia could be hit should there be another slump in advanced economies, as well as by volatile commodity prices, especially high oil prices, and volatile capital flows.

"Continued volatility are the risks I see for Asia looking ahead," Singh said when launching IMF's Regional Economic Outlook, a separate report following the World Economic Outlook, in Kuala Lumpur.

He added "overheating pressures" could develop in the second half of this year so that policymakers should be ready to adjust their policies to support stable, non-inflationary growth.

"In the short term, assuming that market conditions continue to stabilise, as they have in the last few months, there is a concern that overheating pressures could again begin to assert themselves in Asia," he said.

He said core inflation in many countries was still "quite high." He added it was also important for Asia, especially China, to further develop domestic demand and attract investment.

The IMF's World Economic Outlook report for 2012 said recessions in Europe and turmoil in the Middle East had hit Asia's export markets, forcing downward revisions to regional growth forecasts.

But it said resilient domestic demand in China, the world's second biggest economy, and the capacity of Asian banks to fill the liquidity gap left by constrained European lending would help growth recover in 2013.

Emerging Asia -- excluding the advanced economies of Australia, Japan and New Zealand -- would see growth fall 0.5 percent this year to 6.8 percent, before rising to 7.4 percent next year.

Growth in China has slowed recently, falling to 8.1 percent in the first quarter from 9.7 percent a year earlier, as domestic demand drops and Europe's debt woes curb business activity.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • ToyotaPH continues it’s strong sales in February
    ToyotaPH continues it’s strong sales in February

    Toyota Motor Philippines (TMP) sustains its strong sales in its February performance. Toyota’s strong performance last month was due to the  high demand of the Vios, with sales of 2,012 units and of course the rest of Toyota’s line up such as the Fortuner, Innova, Wigo, Hilux, Avanza and Corolla Altis. Toyota’s luxury brand, Lexus, recorded 60 units last month. …

  • No apology, but Noy seeks understanding
    No apology, but Noy seeks understanding

    There was no apology, but President Aquino yesterday expressed regret, took “full responsibility” and appealed to the nation for “deepest understanding” for the Jan. 25 Mamasapano raid in which dozens died, including 44 police Special Action Force (SAF) commandos. “To every Filipino who has felt failure or has been hurt because of the events related to this operation, it is with abiding humility that I ask for your deepest understanding,” Aquino said in a speech before the 246 new graduates of …

  • MVP on endorsement: Thanks, I’m no politician
    MVP on endorsement: Thanks, I’m no politician

    Businessman Manuel V. Pangilinan is grateful for Sen. Miriam Defensor-Santiago’s praise and presidential endorsement, but says he is not a politician. In an interview on the sidelines of the launch of the search for The Outstanding Young Men (TOYM) of the Philippines 2015 Wednesday night, Pangilinan dismissed the idea of running for president in the 2016 elections. “I’m not a politician, I’m just an ordinary business person,” he added. Santiago endorsed Pangilinan as a presidential candidate …

  • No Lenten break in operations vs lawless groups – AFP
    No Lenten break in operations vs lawless groups – AFP

    The Armed Forces of the Philippines (AFP) is not suspending its offensive against the Abu Sayyaf, New People’s Army (NPA) and other lawless groups during the Holy Week, an official said yesterday. Lt. Col. Harold Cabunoc, AFP public affairs office chief, said the AFP leadership is leaving it up to area and division commanders whether to raise the alert status in preparation for the Holy Week. Those deployed in areas where there are ongoing law enforcement operations against terrorist groups …

  • Probe harassment vs human rights lawyer, CA orders AFP
    Probe harassment vs human rights lawyer, CA orders AFP

    The Court of Appeals (CA) has ordered the Armed Forces of the Philippines (AFP) to investigate a human rights lawyer’s claim of harassment, including surveillance, by several military officers. In a 22-page decision, the former Special Sixth Division of the appellate court granted the petition for writ of amparo and habeas data of Maria Catherine Dannug-Salucon. The CA ordered the AFP to identify the officers behind the surveillance and file charges against them. The CA ruling said …

  • Noy vows to dismantle bata-bata system in PNP
    Noy vows to dismantle bata-bata system in PNP

    President Aquino vowed yesterday to dismantle the culture of factionalism or the bata-bata system within the Philippine National Police as he continued the search for the next PNP chief. Speaking at the Philippine National Police Academy (PNPA) commencement exercises here, the President said the country needed solidarity among leaders and members of the police force so that the policemen would be effective protectors of Filipinos. “Our challenge to the next chief of our national police force: …

  • Envoy to expats: Retire, invest in Phl
    Envoy to expats: Retire, invest in Phl

    Retire and invest in real estate in the Philippines, especially now that the country has made it to the top 10 retirement destinations in the world. This is the message being spread by the Philippine embassy in Washington, with Ambassador Jose Cuisia Jr. leading the refrain in meetings with various Filipino-American communities in the US. In his talks, Cuisia said that an affordable cost of living as well as warm climate and people are just some of the things that make the Philippines a top …

  • PNPA spotlight falls on Ampatuan grandson
    PNPA spotlight falls on Ampatuan grandson

    The stigma of being a namesake of the principal suspect in the 2009 Maguindanao massacre did not prevent Cadet First Class Andal Ampatuan III from entering and graduating from the Philippine National Police Academy (PNPA). Ampatuan III, now with a rank of police inspector, is a grandson of former Maguindanao governor Andal Ampatuan Sr. The younger Ampatuan was among the 246 graduates of the PNPA “Lakandula” Class of 2015. Ampatuan III’s mother is Bai Rebecca Ampatuan, a daughter of the …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options