Economic Outlook and Policy Challenges Markus Rodlauer Deputy Director China Mission Chief IMF Asia and Pacific Department December 2013 World Economic Outlook 2 Global growth still weak ID: 514988
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Slide1
Five Years After GFC
Economic Outlook and Policy ChallengesMarkus RodlauerDeputy Director, China Mission ChiefIMF, Asia and Pacific DepartmentDecember 2013Slide2
World Economic Outlook
2Slide3
Global growth still weak, with risks on the downside
Slightly slower growth in 2013 than last year, with modest pick up in 2014
Shifting cyclical positions
W
eaker
prospects
in major emerging market economies
Stabilizing Euro Area
Expansion in the United StatesDownside risks still dominateCrisis risks from AEs lowered, but further policy actions neededNew risks from growth slowdown in EMsFinancial market volatility may return
3Slide4
World
U.S.Euro AreaJapanBrazilRussiaIndiaChina
2013(Oct.
2013)2.9
1.6
-0.4
2.0
2.5
1.53.87.62013(Jul. 2013)3.11.7-0.62.02.52.55.6
7.8
2014(Oct. 2013)3.62.61.01.22.53.05.17.32014(Jul. 2013)3.82.70.91.23.23.36.37.7
WEO Real GDP Growth Projections (percent change from a year earlier)
Source: IMF, World Economic Outlook.
WEO
growth forecast
revised
down,
mainly
due to
emerging economies
4Slide5
Outlook for Asia
5Slide6
Growth has slowed across much of Asia …
6Slide7
… and Asia was not spared from the re-pricing
of financial assets7Slide8
8Still, Asia remains the global growth leader
Asia: Real GDP Growth ( year on year percent change)
2012
2013
2014
Asia
5.1
5.1
5.3
Advanced Asia2.32.11.5 Japan2.02.01.2
East Asia
6.6
6.7
6.6
China
7.7
7.6
7.3
Korea
2.0
2.8
3.7
South Asia
3.5
4.0
5.2
India
3.2
3.8
5.1
ASEAN
5.7
4.9
5.3
Indonesia
6.2
5.3
5.5
Malaysia
5.6
4.7
4.9
Philippines
6.8
6.8
6.0
Singapore
1.3
3.5
3.4
Thailand
6.5
3.1
5.2
Vietnam
5.2
5.3
5.4Slide9
Economic Policy Implications
9Slide10
Euro Area: Banking repair; banking union; structural reforms Japan: Medium-term fiscal consolidation plan (right speed; measures);
structural reforms
US:
Reduce fiscal
uncertainty; monetary
policy communicationPolicy Challenges for Advanced Economies: What needs to be done? 10Slide11
Policy Challenges for EM and Developing Economies: What needs to be done?
No one-size-fits-all ! Ensure solid macro fundamentals – fiscal positions (space), monetary
policy frameworks
Contain excessive leverage -
(macro)prudential
Accelerate
structural
reforms – supply bottlenecks (infrastructure), rebalancing, finance, prices, …. Let exchange rate adjust in response to shifts in capital flows; capital flow management measures and intervention in certain circumstances11Slide12
Recap
Global growth subdued and dynamics changingSlowdown in emerging markets Gradual pickup in advanced economiesDownside risks continue to dominate
Economic
policy agenda
AEs
: credible medium-term fiscal frameworks,
repair
financial systems, structural reforms (EU, Japan)EMs: prepare for monetary policy normalization, somewhat lower growth Asia: implement structural reforms to boost long-term growth (infrastructure, finance)12Slide13
Thank You!
Markus RodlauerDeputy Director, China Mission ChiefIMF, Asia and Pacific DepartmentDecember 2013