Asia doing better than other regions, may recover faster says IMF

Asia is doing better than other regions in the world in the fight against the deadly virus coronavirus and can recover faster, a top official from the International Monetary Fund has said.

Chang Yong Rhee, Director of the IMF’s Asia and Pacific Department, also stated that the impact of the coronavirus on Asia could be less across the board, and unprecedented.

“Asia continues to be doing better than other regions and might recover better faster. Average growth in Asia is still higher than in other regions,” Rhee told  PTI in an interview.

"We expect growth in Asia to stall at zero per cent in 2020. This is a remarkable downgrade since Asia has not experienced zero growth in the last 60 years!” he said.

This is decrease than the annual average increase rates at some point of the Global Financial Crisis (4.7%) or the Asian Financial Crisis (1.3%). The downward revisions are enormous, and across the board, with the most significant reviews for Australia and New Zealand (-9ppt), Japan (-5.9ppt) China(-4.8ppt), he said.

But, considering that Asia was uncovered to the virus as compared to other countries, an improvement may begin earlier, and boom in 2021 is expected to rise to 7.6 per cent, Rhee stated.

“But not all lost growth can be made up speedy and the effect of the global economic contraction on Asia way that the level of output can be predicted to remain beneath the pre-pandemic level in 2021,” he stated.

Responding to a question, Rhee referred to that the IMF’s forecasts are pretty uncertain.

“One of the difficulties in forecasting boom in Asia is the fact that Asian economies are at exceptional tiers of the pandemic. The final results will also depend on the effectiveness of the containment measures and whether or not or no longer there's a second wave of outbreaks. There is potential for surprises on both the upside and the downside,” he stated.

The stability of risks is tilted to the downside, given the uncertainty surrounding the pandemic, he said.