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IMF sees 'long and severe' recession for Asia

IMF sees 'long and severe' recession for Asia article image

The International Monetary Fund (IMF) yesterday reduced its growth forecast for Asia, predicting a "long and severe recession" for the region. The IMF put growth at just 1.3 percent this year, down from its initial forecast of 2.7 percent, because of Asia's reliance on exports. "The spillovers from the global crisis have impacted Asia with unexpected speed and force. Prospects for an imminent rebound of economic activity are weak," noted the IMF regional economic outlook. Wealthier economies, such as Japan, and a number of the South East Asian nations were particularly affected because their industry involved high tech exports, for which demand has dropped significantly, and they had greater exposure to the global financial meltdown. The institution also noted that driving domestic demand would be key to recovery but Asia would not properly recover until worldwide growth resumed: "Despite governments' efforts to invigorate domestic demand, the prospects of a recovery at this stage hinge critically on a rebound in global activity."

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