Asia should begin 'policy normalization' earlier than rest of the world: IMF

WASHINGTON, April 24 (Yonhap) -- The International Monetary Fund on Saturday
called on Asian economies to take the lead in withdrawing economic stimulus
measures, citing their faster-than-expected rebound.
"One year after the deepest recession in recent history, Asia is leading the
global recovery. The 'green shoots' of recovery that emerged in Asia earlier than
elsewhere in 2009 have continued through the first months of 2010," said Anoop
Singh, director of the Asia-Pacific department of the IMF.
"The main near-term challenge for policymakers is judging the appropriate pace
for normalizing monetary and fiscal policy. With Asia recovering faster than
advanced economies, policy normalization in the region will need to begin earlier
than in several other parts of the world," he noted.
The IMF official added that the appropriate pace of such exit strategies will
depend on economic conditions facing each nation "in line with the differences in
cyclical positions and exposure to the various risks."
The comments come as debate is growing over when to roll back economy-boosting
measures introduced to tide over one of the world's worst slumps following the
collapse of Lehman Brothers in late 2008.
After wrapping up a meeting in Washington on Friday, G-20 countries issued a
communique confirming that they will maintain such policies until the private
sector improves enough to support the economic rebound.
Touching on future economic outlook, Singh expected Asian countries will continue
leading the global recovery in the near term, forecasting their average growth at
about 7 percent in 2010 and 2011. The expansion is mostly being driven by China
and India, he added.
He also assessed that Asia's faster recovery "marked a break from the past,"
saying it is the first time that Asia has led a global economic recovery.
Recovery in the region has mostly been driven by exports, but now "resilient"
domestic demand is contributing to the rebound, he said.
The IMF official said that capital inflow to Asia has also surged to reflect the
high level of global liquidity and Asia's "improved resilience and economic
framework."
kokobj@yna.co.kr
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