Tag: IMF

IMF lowers Asia economic growth outlook after months of lockdowns – dpa international

A busy train station in Jakarta prior to all the pandemic lockdown chaos (Simon Roughneen)

The International Monetary Fund (IMF) on Tuesday cut its 2021 economic growth forecast for Asia to 6.5 per cent, citing “new peaks of the pandemic cycle.” Many countries in the region have reported record coronavirus-related deaths and case numbers in the months since the IMF’s April forecast of around 7.5-per-cent growth for this year. “The pandemic’s resurgence has triggered lockdowns that are hampering the recovery,” the IMF said, in its latest Asia-focused economic outlook. Despite the impact of the virus and the harsh restrictions applied in countries such as Australia and Malaysia, Asia is nonetheless is likely to remain the world’s fastest-growing region, the IMF said, while warning that the pandemic is widening a “divide” between the region’s advanced economies and their “emerging” or “developing” counterparts.

IMF cuts US and global GDP growth forecasts, citing “uncertainty” – dpa international

All quiet in a Kuala Lumpur shopping mall during one of Malaysia's pandemic lockdowns, which saw factories cut output due to restrictions on staff numbers, leading to supply shortages elsewhere in the world (Simon Roughneen)

The International Monetary Fund (IMF) on Tuesday cut its global economic growth forecast for 2021 to 5.9 per cent, citing “uncertainty about how quickly the [coronavirus] pandemic can be overcome.” In its latest World Economic Outlook, the IMF pared 0.1 percentage points off its July projection, in part due to “advanced economies” being hit by supply-chain disruptions that were exacerbated by recent pandemic outbreaks and lockdowns in Asia’s manufacturing hubs. Gita Gopinath, the IMF’s director of research, said “global recovery continues but momentum has weakened.” The Fund said it expects the world’s biggest economy, the US, to grow by 6 per cent this year, one percentage point down on what it projected in July, with China, the second-biggest, in line for 8-per-cent expansion.

World Bank forecasts ‘uneven’ 5.6 per cent global economic growth this year – dpa international

Pedestrians seen on Grafton St., one of Dublin's main shopping avenues, in late May 2021. Ireland's economy was one of the few to grow last year (Simon Roughneen)

DUBLIN — The global economy should expand by 5.6 per cent this year but developing countries will struggle to keep up due to “the pandemic’s lasting effects,” the World Bank said on Tuesday. While such growth would be “the fastest post-recession pace in 80 years,” overall global output could remain 2 per cent less than if the pandemic had not happened and the ensuing restrictions on business were not imposed, the bank estimated. While pent up demand could result in wealthy, large economies such as the US and China growing by 6.8 per cent and 8.5 per cent respectively, smaller and poorer nations will have to wait until next year to recover per capita income losses, the bank warned, meaning global growth will be “uneven.” Per capita incomes in many emerging market economies are expected “to remain below pre-pandemic levels,” the bank cautioned, which would likely “worsen deprivations associated with health, education and living standards.”

Only China realizing potential, says economist behind BRICs moniker – dpa international

DUBLIN  — Two decades after coining the acronym BRICs – grouping the economies of Brazil, Russia, India and China – economist Jim O’Neill believes only China  is “fully achieving its potential.” In an article published on Wednesday by the International Monetary Fund (IMF), O’Neill said that, while the quartet’s economies fared relatively well before the 2008 global financial crisis, India has since “notably disappointed,” while Brazil and Russia have posted “very disappointing” performances. China’s annual gross domestic product (GDP) growth exceeded that of the other three BRICS for all but three years between 2001-19, according to World Bank data, leaving it with an economy twice the size of the other three put together.

Despite optimism about global economy, IMF warns of pandemic poverty rise – dpa international

Would-be shoppers in Castlebar in Ireland during the brief period between the country's 2nd and 3rd lockdowns. Retailers have suffered due to countries veering in and out of lockdown since the start of the pandemic (Simon Roughneen)

DUBLIN — The International Monetary Fund said on Tuesday the world economy could recover faster than expected this year, revising its January projection up by 0.5 percentage points to 6 per cent.The United States and China, the world’s two biggest economies, are likely to grow by 6.4 per cent and 8.4 per cent in 2021, driving the global rebound if pandemic-related economic curbs can be rolled back, the IMF said in a report published on Tuesday. But while “a way out of this health and economic crisis is increasingly visible,” according to the IMF’s Gita Gopinath, “divergent recovery paths” will likely result in increased poverty in so-called emerging markets and low-income countries, which could struggle to recover.

Asia’s economic growth to halt for first time since 1960s – dpa international

Evening traffic in Kuala Lumpur before the pandemic (Simon Roughneen)

KUALA LUMPUR — The International Monetary Fund (IMF) believes Asia’s fast-growing economies will “come to a standstill” due to the coronavirus pandemic, faring worse than during the 2008-9 global financial crisis or the 1997-98 Asian crash. The region will experience zero growth for the first time since the 1960s, said Chang Yong Rhee, director of the IMF’s Asia and Pacific Department, who forecast that the economic impact of the pandemic will be “severe, across the board, and unprecedented.” Speaking during a press conference live-streamed from Washington, Rhee said Asia faces “a crisis like no other” due to the pandemic, which has killed over 136,000 people worldwide and prompted governments to impose lockdowns that have hampered commerce. “Containment measures are severely affecting economies,” Rhee said.

Asia’s hidden economies point to harsh realities – Asia Times

PHNOM PENH — The deaths of 39 migrants found dead last month in the back of a truck in the United Kingdom were a grim and tragic reminder that, despite Asia’s world-beating growth rates, poverty and low pay continue to push people to risk their lives to work overseas. Vietnam’s gross domestic product (GDP) per capita has quintupled to US$2,563 over the last 15 years, buoyed by one of the world’s fastest growing economies, but all 39 dead were economic migrants who had left impoverished areas of central and northern Vietnam in search of more gainful employment abroad. As with elsewhere in Asia, these rural regions are dominated by the so-called informal economy, outside of the reach of government protection and regulation. Based on estimates published last year by the World Bank, 47% of all employment in the East Asia and Pacific Region is informal.

Public debt in “emerging Asia” creeps past 50% of GDP – Nikkei Asian Review

Government debt in emerging Asian economies hit 50% of gross domestic product in the third quarter of last year, according to estimates by the Institute of International Finance, in a trend that suggests a regional shift away from fiscal conservatism. “Entering a financial crisis with a weak fiscal position worsens the depth and duration of the ensuing recession, particularly in emerging-market economies, because fiscal policy tends to be procyclical in these cases,” said Vitor Gaspar, director of the International Monetary Fund’s Fiscal Affairs Department. While government debt in emerging Asia is creeping up, it remains low compared with Japan’s 223.1% of GDP and 100.8% in the U.S. “The relatively low public debt gives the region more buffer against a potential global downturn, enabling policymakers to use expansionary fiscal policy to support demand,” said Frederic Neumann, co-head of Asian economic research at HSBC.

U.S.-China trade war has yet to hurt rest of Asia – Nikkei Asian Review

NUSA DUA — Asia is not yet feeling the effects of growing trade friction between China and the U.S., due to the internal strengths of the region’s “solid” economies, according to Takehiko Nakao, president of the Asian Development Bank. The trade dispute “is not as damaging right away,” Nakao told the Nikkei Asian Review on the sidelines of the International Monetary Fund-World Bank meetings being held in Nusa Dua on the Indonesian island of Bali. “The Asian economies are solid,” Nakao said, but he also warned that any escalation of the tariff war between the world’s two biggest economies could hit Asian exporters hard. “If it escalates, if it damages supply chains, as East Asia is connected to [global] supply chains, it could have a dire impact,” Nakao said. The fear is that complex supply chains, in which multinational companies make or source parts for finished goods in countries across Asia before final assembly, often in China, could be disrupted. But for now, domestic demand within Asia’s bigger economies could offset the impact of the trade restrictions, Nakao said earlier at the forum.