Recovery of Asian LDCs weak: IMF
A latest report of International Monetary Fund (IMF) stated that the economic performances of the Asian low-income countries have been much weaker than the regional emerging economies in the aftermath of global financial crisis.
In a press conference organized here to brief media over the latest Asian economic scenarios, IMF´s director of the Asia and Pacific Department Anoop Singh said that economic recoveries in Asian low-income countries have proceeded at slower pace than emerging Asia, reflecting a weaker impact from the global financial crisis in the downturn and structural fragilities.
The report estimated that Asia will continue to lead the global recovery and grow by about 7 percent both in 2010 and 2011. “High assets values, strong consumer confidence and gradual improvement in employment conditions are expected to sustain consumption to more normal level to boost investment,” noted the report.
When asked about the threat posed by rising inflation in the region, particularly in South Asia, Singh blamed higher price rise of fuel and energy for the trouble and said that there is a need of a coordinated fiscal and monetary measures to tame inflationary effects.
While part of the increased owned to food and energy prices, core prices in these economies also rose revealing rebound risks to sustained price rise.
The IMF has also warned that adopting a tight monetary policy to contain inflation may also pose the risk of attracting further inflows that could complicate macroeconomic management.
The report urged the Asian countries to work together for maintaining rapid improvement in the standard of living and increasing the region´s resilience to external shocks, and strengthening domestic sources of growth.
Singh also called upon comprehensive reforms including measures to boost productivity in the service sector, enhance financial markets, improve investment climate and allow more exchange rate flexibility.
Source : Republica