Asia and Pacific
Asia and Pacific Regional Economic Outlook
September 2006
World Economic and Financial Surveys
This report gives the IMF's view of the outlook for Asia, identifies the main risks to growth, and considers the key factors that will influence capital inflows. The REO also discusses short-run macroeconomic policy issues for the region, as well as longer-term challenges, including the need to raise consumption and rebalance growth, develop further regional financial and capital markets, and address growing income inequality. |
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Contents
| Definitions | |
| Executive Summary | |
| I. | Recent Developments and Outlook |
| Growth | |
| Inflation | |
| External Sector | |
| Risks | |
| II. | Financial Developments in Emerging Asia |
| Assessment of the Recent Correction | |
| Outlook for Capital Inflows to Emerging Asia | |
| III. | Macroeconomic Policy Issues |
| Monetary Policy | |
| Fiscal Policy | |
| IV. | Asian Equity Markets: Growth, Opportunities, and Challenges |
| The Emergence of Asian Stock Markets | |
| Performance of Asian Emerging Stock Markets | |
| Valuation of Asian Markets | |
| Equity Prices and Economic Activity | |
| Policy Implications | |
| References | |
| V. | Private Consumption in Emerging Asia |
| Introduction | |
| Private Consumption Trends in Emerging Asia | |
| Determinants of Private Consumption in Emerging Asia | |
| Estimation Results | |
| Is Private Consumption in Emerging Asia Too Low? | |
| Potential Policy Implications | |
| References | |
| VI. | Rising Inequality and Polarization in Asia |
| Introduction | |
| Trends and Patterns | |
| Determinants of Inequality and Polarization | |
| Did the Asian Crisis Increase Inequality | |
| Conclusion | |
| Data Appendix | |
| References | |
| Boxes | |
| 1.1. | Outlook for Asia’s Electronics Sector |
| 1.2. | The Impact of Japan’s Recovery on Asia |
| 1.3. | Spillovers from Asia Are Affecting Australia and New Zealand |
| 1.4. | Worker’s Remittances: A Gravity Model |
| 1.5. | Pacific Island Countries: Regional Issues and Prospects |
| 2.1. | Hedge Funds—Recent Developments in Asia |
| 4.1. | Capital Flows in Emerging Asia: How Volatile Are They? |
| 4.2. | Fostering Financial Integration and Economic Stability |
| 5.1. | Credit, Investment, and Growth in Post-Crisis Asia: A Tale of Two Sectors |
| 6.1. | Spatial Inequality in China and India |
| 6.2. | Income Inequality and Social Polarization in Korea |