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IMF EXPECTATIONS FOR 2010


  The International Monetary Fund announced its high expectations for the Asian economies to recover from the malice of current economic conditions and set the path for growth once more by next year.


IMF Expectations for 2010

The International Monetary Fund announced its high expectations for the Asian economies to recover from the malice of current economic conditions and set the path for growth once more by next year.

Dominique Strauss, the IMF managing director, has previously warned the Asian block that the consequences of the global crisis won’t pass unnoticed, especially because these economies rely heavily on exports and overseas demand, as a main source of income.

Hence, the stimulation of domestic demand is absolutely essential for the future well being of these states. Also, once the world’s economy regains its footing a rapid recovery is most likely to kick in causing growth rates to spur at a pace twice of that of 2009. 

Strauss also mentioned that the economic growth rate is expected to reach 5% by the middle of next year, which suggests that these economies are not in such a bad shape and have the potential for fast recovery.

Moreover, according to Strauss, China, the second largest economy in the region after Japan, might actually achieve the targeted growth rate of 8 per cent. However, it will be quite a challenge to achieve such a figure since the IMF predictions for Chinese economic growth rates are at 6.7% for the current year compared to 9% in 2008.

Last week, the IMF lowered its estimate for the world’s economic growth rate in 2009, from its November estimate of 2.2% to 0.5%, which is the lowest figure ever since the end of World War II.

Both, investor and consumer confidence plunged dramatically to levels the world has not witnessed since a decade ago. 

Meanwhile, 20 million Chinese workers, mostly immigrants to the cities, lost their jobs due to the economic slow down. The Chinese government estimated that 15% of the 20 million workers that lost their jobs had left the cities and returned back to the country’s rural villages.

Furthermore, China has been experiencing strikes and riots, especially by taxi drivers and the unemployed, which led to violence and collateral damages. Meanwhile companies continue laying off their employees under the banner of “Global Financial Crisis”.

Economic indicators show that China’s industrial sector has been contracting continuously for the past 6 months, where it fell from 100 points to 42.2 points.

A major securities company in Peking announced an expected decline in the level of domestic consumption, which accompanied with declines in global demand, have already started shutting down businesses and factories. 

China’s economy faces a lot of “painful changes” as a result of the global slowdown. But those changes are obviously for the good and in the interest of the people of China. It has to be done.

Source: asiaecon.org
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Source: www.asiaecon.org |


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