{ "title": "Transcript of April 2019 Asia and Pacific Department Press Briefing", "publication": "IMF News, April 12, 2019", "sourceUrl": "https://www.imf.org/en/news/articles/2019/04/12/tr041219-transcript-of-april-2019-asia-and-pacific-department-press-briefing", "canonical": "https://www.imf.org/en/news/articles/2019/04/12/tr041219-transcript-of-april-2019-asia-and-pacific-department-press-briefing", "overlayPath": "/en/news/articles/2019/04/12/tr041219-transcript-of-april-2019-asia-and-pacific-department-press-briefing/index.md", "summary": "Asia Pacific continues to account for more than 60% of the global gross.", "publishDate": "2019-04-12", "sections": [ { "heading": "Regional outlook and headline projections", "content": "- Asia Pacific continues to account for more than 60% of the global gross.\n- Asia projected to grow by 5.4% in 2019 and 5.4% in 2020 (largely unchanged from last October).\n- China growth projection revised to 6.3% for 2019 (up from 6.2% in October).\n- Japan projected to expand by 1 percent in 2019.\n- India growth expected to pick up to 7.3% this fiscal year.\n- Korea growth forecast kept at 2.6% for 2019.\n- Australia growth in 2019 projected at 2.1%.\n- New Zealand growth in 2019 projected at 2.4%.\n- ASEAN growth projected to remain broadly stable at around five percent in the next two years.\n- Growth in Pacific Island countries and other small states expected to recover after several natural disasters last year, with significant variation among countries." }, { "heading": "Key risk factors highlighted", "content": "- Downside risks are \"tilted decidedly to the downside,\" including:\n - Faster than expected deceleration in global growth and trade.\n - Possibility of renewed trade tensions, including uncertainty around a U.S.-China deal.\n - Higher oil prices.\n - Global financial market volatility and potential generalized risk-off episodes.\n- Specific trade-related concerns:\n - If a U.S.-China agreement involves \"managed trade\" or preferential access, it could crowd out other exporters to China and raise broader worries about the multilateral trading system.\n - Markets have priced in some agreement; setbacks could trigger negative market reactions.\n- Financial vulnerabilities:\n - Tighter global financial conditions would disproportionately affect countries with higher private or public sector leverage." }, { "heading": "Country- and policy-specific notes (selected)", "content": "- China:\n - Revision to 2019 growth to 6.3% reflects assumption that a planned U.S. tariff increase (from 10% to 25% on $200 billion packages assumed last October) will not occur and larger-than-expected fiscal policy plans by Chinese authorities.\n - Policy advice: continue deleveraging, expand private sector role, boost consumption, open trade and investment, modernize fiscal/financial/monetary frameworks.\n - Fiscal measures supported: reducing Social Security contribution rates and reducing VAT dispersion to boost consumption and jobs; need to make tax system more progressive and boost spending on pension, education, and health.\n - Monetary stance viewed as appropriately accommodative given prior reserve requirement cuts and low inflation pressures.\n- Japan:\n - Growth in 2019 projected at 1 percent; planned consumption tax increase from 8 to 10 percent in October 2019 noted.\n - IMF view: consumption tax increases are needed over time to manage high debt and aging-related spending; offsetting measures should protect near-term growth and fiscal policy impulse.\n - On current policies, a fiscal contraction of about half a percent is expected in 2020 absent offsets.\n- India:\n - Continue gradual capital account liberalization; prioritize FDI, then gradual opening to portfolio flows.\n - Full convertibility of the rupee should be considered only after achieving debt sustainability targets (reference to medium-term fiscal strategy limiting debt at 40 percent once sustainability is achieved).\n- Korea:\n - Projected growth 2.6% in 2019, supported by private consumption pickup and supplementary budget stimulus; additional stimulus recommended to focus on social safety net, labor market functioning, and investment promotion.\n- Sri Lanka:\n - Ahead of elections, authorities urged to pursue sustained revenue-based fiscal consolidation, vigilant monetary policy, and reserve-building to maintain market confidence given high public debt.\n - Structural reform priorities: trade opening, SOE reforms, competitiveness; labor reforms to address aging and low female labor participation.\n- Bangladesh:\n - Banking sector concerns: rising non-performing loans in state-owned and private banks despite strong economic performance.\n - IMF to publish a Financial Sector Stability Review with concrete steps; financial inclusion and private sector development (including microfinance legacy) highlighted." }, { "heading": "Fiscal/monetary policy guidance and priorities", "content": "- Overarching guidance for Asia:\n - Aim to stabilize growth while ensuring sustainability and increasing resilience.\n - Be agile, vigilant, and prudent; preserve policy space to respond if downside risks materialize.\n - Financial policies should address vulnerabilities from high leverage and build buffers.\n - Structural reforms to sustain medium-term growth: labor and product market reforms, market opening to boost employment, firm dynamism, and innovation; stress social spending to address inequality and inclusion gaps.\n- Crisis response sequencing:\n - If downside risks materialize, fiscal policy should be first line of defense in many cases, with monetary policy responding based on country-specific circumstances and available space.\n- Infrastructure and Belt and Road Initiative (BRI):\n - BRI can boost infrastructure, connectivity, trade, and growth if projects are implemented with open procurement, high governance standards, fiscal sustainability focus, and private sector participation.\n - IMF engagement includes sharing best practices and capacity development via the China-IMF Capacity Development Center." }, { "heading": "Q&A — notable quantitative and technical points", "content": "- Tariff assumptions and trade mechanics:\n - Reference to a U.S. tariff rate of 10% on $200 billion packages and a previously assumed increase to 25% that was revised given the tariff truce.\n - Trade diversion and frontloading noted as channels that altered observed trade flows in 2018; sharper trade flow declines observed in late 2018 and early 2019.\n- Indonesia inflation:\n - CPI inflation fell from 3.1 percent at end-2018 to 2.4 percent in March (main driver: food prices); core inflation excluding food/volatile items around 3 percent.\n - Bank Indonesia raised rates by 175 basis points in 2018 and has since kept policy rate on hold; stance judged appropriate but authorities should monitor and stand ready to loosen if inflation continues to decline.\n- Japan fiscal arithmetic:\n - Consumption tax increase planned from 8 to 10 percent in October 2019; without offsetting measures, fiscal stance implies about a 0.5 percent contraction in 2020.\n- New Zealand:\n - Outlook weaker in 2019 due to fading reconstruction, net immigration, and property tailwinds; policy space exists for monetary easing and fiscal stimulus if needed.\n- North Korea:\n - North Korea is not an IMF member; IMF has received no communication from North Korean authorities regarding engagement; any engagement would depend on views of IMF shareholders.\n\nTranscript of April 12, 2019 Asia and Pacific Department press briefing — IMF Communications Department.\n\n---\n\n\n References\n\n- People's Republic of China and the IMF\n- Australia and the IMF\n- Bangladesh and the IMF\n- India and the IMF\n- Indonesia and the IMF\n- Japan and the IMF\n- New Zealand and the IMF\n- Republic of Korea and the IMF\n- Sri Lanka and the IMF\n- Transcripts\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/04/12/tr041219-transcript-of-april-2019-asia-and-pacific-department-press-briefing" } ], "bullets": [ "[Markdown version](/en/news/articles/2019/04/12/tr041219-transcript-of-april-2019-asia-and-pacific-department-press-briefing/index.md)", "[Structured JSON version](/en/news/articles/2019/04/12/tr041219-transcript-of-april-2019-asia-and-pacific-department-press-briefing/index.json)", "[Bundle manifest](/en/news/articles/2019/04/12/tr041219-transcript-of-april-2019-asia-and-pacific-department-press-briefing/bundle-manifest.json)", "Published: April 12, 2019", "Asia Pacific continues to account for more than 60% of the global gross.", "Asia projected to grow by 5.4% in 2019 and 5.4% in 2020 (largely unchanged from last October).", "China growth projection revised to 6.3% for 2019 (up from 6.2% in October).", "Japan projected to expand by 1 percent in 2019.", "India growth expected to pick up to 7.3% this fiscal year.", "Korea growth forecast kept at 2.6% for 2019.", "Australia growth in 2019 projected at 2.1%.", "New Zealand growth in 2019 projected at 2.4%.", "ASEAN growth projected to remain broadly stable at around five percent in the next two years.", "Growth in Pacific Island countries and other small states expected to recover after several natural disasters last year, with significant variation among countries.", "Downside risks are \"tilted decidedly to the downside,\" including:", "Specific trade-related concerns:", "Financial vulnerabilities:", "China:", "Japan:", "India:", "Korea:", "Sri Lanka:", "Bangladesh:", "Overarching guidance for Asia:", "Crisis response sequencing:", "Infrastructure and Belt and Road Initiative (BRI):", "Tariff assumptions and trade mechanics:", "Indonesia inflation:", "Japan fiscal arithmetic:", "New Zealand:", "North Korea:", "[People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)", "[Australia and the IMF](http://www.imf.org/external/country/AUS/index.htm)", "[Bangladesh and the IMF](http://www.imf.org/external/country/BGD/index.htm)", "[India and the IMF](http://www.imf.org/external/country/IND/index.htm)", "[Indonesia and the IMF](http://www.imf.org/external/country/IDN/index.htm)", "[Japan and the IMF](http://www.imf.org/external/country/JPN/index.htm)", "[New Zealand and the IMF](http://www.imf.org/external/country/NZL/index.htm)", "[Republic of Korea and the IMF](http://www.imf.org/external/country/KOR/index.htm)", "[Sri Lanka and the IMF](http://www.imf.org/external/country/LKA/index.htm)", "[Transcripts](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2019/04/12/tr041219-transcript-of-april-2019-asia-and-pacific-department-press-briefing/index.md", "json": "/en/news/articles/2019/04/12/tr041219-transcript-of-april-2019-asia-and-pacific-department-press-briefing/index.json", "bundleManifest": "/en/news/articles/2019/04/12/tr041219-transcript-of-april-2019-asia-and-pacific-department-press-briefing/bundle-manifest.json" }, "generatedAtUtc": "2026-09-25T22:39:45.748Z" }