Regional Economic Outlook: Asia and Pacific, April 2012: Managing Spillovers and Advancing Economic Rebalancing
Asia and Pacific, April 27, 2012
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- Regional Economic Outlook: Asia and Pacific, April 2012: Managing Spillovers and Advancing Economic Rebalancing
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Bibliographic details
- Published: April 27, 2012
- Series: Asia and Pacific
Executive summary: growth outlook and key risks
- Growth projection: "now projected at 6 percent in 2012, rising to about 6½ percent in 2013."
- Outlook contingent: Barring the realization of downside risks to the global economy, growth in the Asia and the Pacific region is expected to gain momentum over the course of 2012.
- Buffers and vulnerabilities:
- Stronger economic and policy fundamentals have helped buffer the region's economies against the global financial crisis.
- These fundamentals have limited adverse financial market spillovers and ameliorated the impact of deleveraging by European banks.
- However, "a sharp fall in exports to advanced economies and a reversal of foreign capital flows would have a severe impact on the region."
Policy challenge: calibrating insurance and macroeconomic stances
- Central policy question: "How Much Insurance Is Still Needed?"
- Monetary policy stance:
- Some Asian and Pacific economies can afford to lengthen the pause in the normalization of their macroeconomic policies that was initiated when the global recovery stalled late in 2011.
- Others may need a faster return to more neutral policy stances.
- Fiscal policy stance:
- "The pace of fiscal consolidation should be calibrated to country-specific circumstances."
- Overarching objective: support stable, noninflationary growth while adjusting policy normalization to country-specific conditions.
Financial linkages, spillovers, and deleveraging risks
- Financial spillovers:
- The report examines "the Evolution of Asian Financial Linkages: Key Determinants and the Role of Policy" and sensitivity of Asian financial markets to market movements in systemic economies.
- It addresses whether macroeconomic policies can reduce financial sensitivities in Asia.
- Deleveraging by European banks:
- The report includes a chapter on "The Likely Effect on Asia of a Sharp Deleveraging by European Banks."
- Topics covered: "The Role of European Banks in Asia," "What Happened during the Lehman Crisis?" and "What Are the Implications of a Future Shock?"
- Evidence indicates that deleveraging and abrupt changes in foreign claims could materially affect domestic credit supply and financial stability in parts of the region.
Structural rebalancing and regional implications
- China and regional spillovers:
- The report asks "Is China Rebalancing? Implications for Asia" and considers both whether China is rebalancing and what the implications are for other Asian economies.
- Foundations for sustainable growth:
- A chapter on "Laying the Foundations for Sustainable Growth" highlights the need for structural policies to support rebalancing and long-term resilience.
- Low-income and small island economies:
- A dedicated chapter examines "Asian Low-Income and Pacific Island Countries: Opportunities and Risks from Increased Regional Integration."
- Key themes: increased investment from within Asia to regional LICs and greater links between Pacific Island Countries and regional economies.
Contents highlights (analytic focus areas)
- Ensuring Stable Growth: signs of stabilization, a 2012 turnaround, risks, policy calibration, and foundations for sustainable growth.
- Financial linkages: determinants of Asian financial betas and the role of policy in reducing sensitivities.
- Deleveraging scenarios: role of European banks, lessons from Lehman, and implications of future shocks.
- China’s rebalancing: assessment of rebalancing and spillover effects to Asia.
- Regional integration: impacts on Asian LICs and Pacific Island Countries from increased regional links.
Regional Economic Outlook: Asia and Pacific, April 2012: Managing Spillovers and Advancing Economic Rebalancing
Content in this bundle
- Fig Box1 2
- China and India: Population Distribution
- Fig Box1 4
- Figure 1.1. Real GDP Growth in the United States and the Euro Area
- Figure 1.10. Selected Asia: Change in One-Year Ahead Inflation Expectation since the End of 2011
- Figure 1.11. Nonresident Investment in Selected Asian Markets
- Figure 1.12. Selected Asia: Stock Markets
- Figure 1.13. Selected Asia: Exchange Rates against the U.S. Dollar
- Figure 1.14. Selected Asia: Share of Exports Linked to Demand from Europe, 2010
- Figure 1.15. Selected Asia
- Fig1 16
- Fig1 17
- Figure 1.18. Selected Asia: Current Account Balances
- Figure 1.2. Selected Asia: Changes in Real GDP at Market Prices in 2011
- Figure 1.20. Consolidated Foreign Claims of European Banks on Asia
- Figure 1.21. China: Potential Effects of Property Downturn
- Figure 1.22. Asia: Pass-Through from Global Energy Prices to Domestic Food and Energy Prices
- Figure 1.23. Selected Asia: Real Interest Rates
- Figure 1.24. Selected Asia: Nominal Policy Rates and Taylor Rule Implied Rates
- Figure 1.25. Asia: Real Effective Exchange Rates
- Figure 1.26. Emerging Asia and Latin America: Real Exchange Rates and Reserves
- Figure 1.27. Selected Asia: Cyclically Adjusted General Government Balances
- Figure 1.28. Selected Asia: Fiscal Impulse in 2012
- Figure 1.29. Gross Public Debt, 2011
- Fig1 3
- Figure 1.30. Share in Global Consumer Goods Import Demand, 2010
- Figure 1.4. Emerging Asia: Trade Balance
- Fig1 5
- Figure 1.6. Selected Asia: Labor Market Conditions
- Figure 1.7. Emerging Asia: Measure of Excess Credit Growth
- Figure 1.8. Selected Asia: Fiscal Impulse in 2011
- Fig1 9
- Figure 2.1. Equity Returns: Selected Systemic Economies and Asia
- Figure 2.2. Asian Financial Betas and Global Financial Shocks
- Figure 2.3. Financial Betas across Asian Economies
- Figure 2.4. Asia: Changes in Betas from 2002-07 to 2008-11
- Figure 3.1. Consolidated Foreign Claims of European and U.S. Banks on Emerging Asia
- Figure 3.2. BIS Reporting Banks' Consolidated Foreign Claims on Selected Asian Economies by Sector
- Figure 3.3. Asia: Export Credit Agency Backed Trade Finance
- Figure 3.4. Consolidated Foreign Claims on Asian Economies
- Figure 3.5. Differences in Policy Responses: Asia versus Non-Asia
- Figure 3.6. Debt-to-Equity Ratio in Financial Firms at End-2007
- Figure 3.7. Selected Asia: Real Policy Rates
- Figure 4.1. China: Current Account Balance and Components
- Fig4 10
- Figure 4.11. China: Distribution of FDI and Imported Value Added
- Figure 4.12. China: Share in Global Consumption versus Share in Global Consumer Goods Imports
- Figure 4.14. Selected Asia: Correlation of Exports to China with China?s Exports
- Figure 4.15. U.S. Imports from Asia for Final Demand, 2010
- Figure 4.2. China: Composition of Exports and Imports
- Figure 4.3. China: Export and Import Prices, and Terms of Trade
- Figure 4.4. China: Mineral Import Volumes
- Fig4 5
- Figure 4.6. China: Import Quantum Index
- Figure 4.7. China: Number of Employees
- Figure 4.8. Global Shares in Photosensitive Semiconductor Devices Exports
- Figure 4.9. China: Loss-Making Enterprises
- Figure 5.1. Selected Emerging Asia: Share in Global Output and FDI
- Fig5 10
- Figure 5.2. Selected Emerging Asia: Share in Regional FDI
- Figure 5.3. China: Foreign Direct Investment
- Figure 5.4. Selected Emerging Asia: Growth in FDI Relative to Regional Average
- Figure 5.5. Selected Emerging Asia: Growth in FDI Relative to Regional Average
- Figure 5.6. Selected Emerging Asia: Trade Openness and FDI
- Figure 5.7. Selected Emerging Asia: Exports Exposure
- Figure 5.8. PICs: Official Development Aid by OECD Donors
- Figure 5.9. Selected PICs: Tourist Arrivals by Country of Residence
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References
- Press Release: Asia Faces Stronger Growth, but Further Rebalancing Critical
- Asia and Pacific: Regional Economic Outlooks Archive
- Regional Economic Outlooks
- IMF Regional Reports
- World Economic Outlook Archives
- Asia and the IMF
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