|
With G20 now the forum for steering the economy,
the forecasts show emerging Asian nations powering
the return to growth
Istanbul ▪ The International Monetary Fund raised
its forecast for global growth next year as more
than USD2 trillion (RM7 trillion) in stimulus
packages and demand in Asia pull the world economy
out of its worst recession since World War II.
The Washington-based IMF said the economy will
expand 3.1% in 2010, more than a July forecast of
2.5%. China's economy will grow 9% and India's
6.4%.
That compares with grown of 1.7% in Japan, 1.5% in
the US and 0.3% in the euro region.
Days after President Barack Obama and other
leaders declared that the Group of 20 is now the
main forum for steering the global economy, the
forecasts show emerging Asian nations powering the
return to growth.
The IMF, whose members are gathering in Istanbul
for next week's annual meeting, warned that the
recovery would be "weak by historic standards" and
said restoring banks to health remains a priority.
"The global economy appears to be expanding again,
pulled by the strong performance of Asian
economies and stabilisation or modest recovery
elsewhere," IMF said in its semi-annual World
Economic Outlook. Still, the rebound will be
"sluggish, credit constrained and, for quite some
time, jobless."
European stocks gained, with the Dow Jones
Stoxx600 Index adding 0.5% to 243.74 at 8:20am in
London.
The world economy will contract 1.1% this year,
less than the 1.4 projected in July, the IMF said.
The world escaped the threat of spiraling into a
prolonged slump this year after governments poured
trillions into their economies. The Standard &
Poor's 500 Index has surged 56% since March, oil
prices have doubled and house prices have started
to recover in the US and the UK.
Policy makers must nevertheless stay focused on
making sure that the improvement in global credit
markets and banking continues, the IMF said. It
estimated yesterday that banks still have to
announce a further USD1.5 trillion in writedowns.
While the recovery "is most evident in financial
markets", conditions are "still very difficult for
borrowers", the IMF noted. "There has been only
very limited progress in removing impaired assets
from bank balance sheets."
Emergency government measures have also lumbered
them with soaring debt. The IMF said yesterday
that politicians must commit to "large reductions
in deficits" once the recovery is secured and
devise a post-crisis strategy to ensure confidence
in fiscal solvency.
The anticipated rebound in China may nevertheless
counter some of the recessionary pressures still
in the global economy, according to the report
"The policy stimulus in China could support
recoveries in other parts of Asia," the IMF said.
Kansai Paint Co, Japan's largest paint maker, said
on 18 September it aims to boost profit by a third
next year as demand for cars in Asia drives sales.
-- Bloomberg 02/10/2009 |
