Asia, PHL Continue to be Driver of Global Growth –IMF

Asia, including the Philippines, would continue to be the driver of global growth, consistent with past International Monetary Fund (IMF) projections for a region of largely emerging economies.

“This region has the strength in terms of the interconnectedness,” IMF Deputy Managing Director Mitsuhiro Furusawa said in a press briefing on the sidelines of an Asia-Pacific Economic Cooperation (APEC) event held here.

The IMF recently said it sees downside risk to its most recent global growth projections, made in July. Revisions will be announced next month, Furusawa disclosed.

In the case of the Philippines, one of the world’s fastest-growing economies at a rate the IMF currently expects to be more than 6 percent this year, Furusawa and his colleague IMF director Odd Per Brekk both said growth prospects remain robust.

Meanwhile, Brekk noted that long-term prospects for growth in global economies are worsening. Still, conditions in advanced economies, at least, are favorable for a near-term pickup.

“The longer-term prospects in both advanced economies and emerging markets are more subdued than they were a couple years ago,” said Brekk.

He explained that in advanced economies, that reflects a combination of lower investment, unfavorable demographics and lower productivity growth. On the other hand, emerging markets face some of those factors in addition to the economic slowdown in China, for many a key export market, as well as an “adjustment going on in credit of the investment pools” and lower commodity prices.

Still, in the short term, Brekk said IMF sees a “slow pickup taking hold” in advanced economies due to easy financial conditions, less fiscal drag and lower energy prices.

The IMF officials pointed to healthy “fiscal and monetary space,” with a current account surplus and a reasonable level of foreign exchange reserves.

“In general we think it’s quite well-placed to manage the spillovers from global developments,” he said. (PNA) SCS/PND/SSC