Asia Pacific economic outlook – May 2009
The May 2009 edition of the Asia Pacific economic outlook highlights the recommendations of the IMF’s ‘Global Financial Stability Report’ (April 2009) on policies that need to be implemented immediately as well as a near-term outlook for China, India, Japan, and South Korea.
China – The economy is performing much better than anticipated as the effects of the stimulus plan spending and increased bank lending filter down. The economy is likely to rebound faster than initially thought.
India – The economy is slowing down but there isn’t any money to do a big fiscal stimulus plan. There has also been the distraction of a protracted election. The central bank has been doing the heavy lifting and is likely to continue in that role.
Japan – The economy has slowed down sharply and the government has introduced its fourth stimulus plan in less than eight months. There are some bright spots but unlikely to push growth into positive territory.
South Korea – Korea may be on the cusp of a recovery because of the sharp interest cuts as well as the $37 billion spending allocated for stimulus spending. The central bank is likely done cutting rates and will keep them at current level in the near to medium term.
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