Hog Kong – Asia is doing better than other regions in the world in their fight against the deadly coronavirus and may 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 said that the impact of the deadly coronavirus on Asia will be severe, across the board, and unprecedented.
“Asia is still doing better than other regions and may recover faster. Average growth in Asia is still higher than other regions,” Ree 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 lower than the annual average growth rates throughout the Global Financial Crisis (4.7 per cent) or the Asian Financial Crisis (1.3 per cent). The downward revisions are substantial and across the board, with the largest revisions for Australia and New Zealand (-9ppt), Japan (-5.9ppt) China(-4.8ppt), he said.
But, since Asia was exposed to the virus before other countries, a recovery may begin earlier, and growth in 2021 is expected to rise to 7.6 percent, Rhee said.
“But not all lost growth can be made up quickly and the impact of the global economic contraction on Asia means that the level of output can be expected to remain below the pre-pandemic level throughout 2021,” he said.
Responding to a question, Rhee noted that the IMF’s forecasts are quite uncertain.
“One of the difficulties in forecasting growth in Asia is the fact that Asian economies are at different stages of the pandemic. The final outcome will also depend on the effectiveness of the containment measures and whether or not there is a second wave of outbreaks. There is potential for surprises on both the upside and the downside,” he said.
The balance of risks is tilted to the downside, given the uncertainty surrounding the pandemic, he said.
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