IMF warns Asia of new-round global economic downturn

BANGKOK, October 29 (TNA) - The US-based International Monetary Fund (IMF) has warned Asian nations to beware of, probably, a new-round of global economic downturn in the foreseeable future, caused by an imbalance of the US and the European economies. Luis Breuer, IMF mission chief in Thailand, cautioned at a seminar on the future of Asia held in Bangkok Monday, that the economic imbalance of the United States and Europe could cause the second-round economic slowdown in both places, which would, again, affect Asia. Breuer, therefore, suggested that Asian economies prepare themselves to cope with the new-round impacts, projecting, however, that the world economic growth rate would rise to 3.6 per cent next year, from a drop to 3.3 per cent this year. Rung Mallikamas, a Bank of Thailand (BOT) director tasked with monetary policies, acknowledged the fluctuations of the world economy at the same seminar, but assessing that the US economy should be improving, thanks to its solutions to trade deficits, although the European economy would continue to slow down, so would the immense Chinese economy despite no serious concerns. According to the BOT director, a probably new world economic slump should affect Thailand's exports and manufacturing, with Thai export growth rate forecast to be only at 4.4 per cent this year. The BOT director foresaw, however, that the Thai economy should keep expanding, boosted by domestic consumption, high employment, rising farmers' income and fund injection by the government, with the national economy expected to grow by 5.7 per cent this year but 4.6 per cent next year, as there will not be flood-rehabilitation spending in 2013. Kasikornbank (KBank) chief executive officer (CEO) Banthoon Lamsam, meanwhile, pointed out that capitals have excessively moved to Asia, as its overall economy has grown faster than those in Europe and America. Banthoon noted that Asia has high potential, as its population forms 60 per cent of the world population, its national income accounts for one-third of worldwide national incomes and it will be half of worldwide national incomes in 50 years, and that the purchasing power of Asia will be stronger; thus, Asia will play important roles in stimulating the world economy in place of the West, which is facing economic woes. The KBank CEO urged Asian countries to further cooperate on trade although the value of trade in Asia has kept expanding rapidly, soaring to 600 billion US dollars now, from 160 billion US dollars in 2007. (TNA)