Asia-Pacific will have the slowest growth since the 1960s, according to the IMF

The economies of the Asia-Pacific region will experience zero growth in 2020, the worst figure recorded since the 1960s, due to the COVID-19 pandemic, although they will go back next year, the International Monetary Fund (IMF) said on Thursday. ).

The director of the IMF's Asia-Pacific Department, Chang Yong Rhee, stated in an article on the institution's website that growth will be less than during the 1998 Asian financial crisis (4.7%) and the 2008 global crisis (1.3%).

"That said, Asia still looks like it will fare better than other regions in terms of (economic) activity," said Rhee, who said the forecast is for the world economy to decrease this year by 3%, the worst figure since the Great Depression of 1929.

"Asia's key trading partners are expected to contract sharply," said the regional director, referring to the 5.9% decrease in GDP expected this year in the United States and the 7.1% drop in the European Union.

Regarding China, Rhees said that its economy will slow from 6.1% in 2019 to 1.2% in 2020, which contrasts with the growth of 9.4% in 2009, after the global financial crisis, thanks to a stimulus that represented 8% of its GDP.

"We cannot expect that magnitude of stimulus this time and China will not help Asia's growth as it did in 2009," the South Korean economist at the IMF concluded.

Australia (-6.50%), New Zealand (-6.7%) and Australia (-6.7) are the countries that have lowered their growth forecasts the most, with an average loss of about 9 percentage points, while Pacific Island countries are the most vulnerable because of their limited health and financial capacity.

Rhees said the forecast for next year is for "robust growth," although it is also uncertain, as it depends on the spread of the new coronavirus and the effectiveness of measures being taken by governments.

At the economic level, he advised direct aid, "not only through financial institutions", to the health sector and to protect people, jobs and companies, especially those of small and medium size.

He also suggested that macroeconomic regulations be relaxed to help sectors affected by the pandemic and that banks and financial institutions take initiatives to increase liquidity in the market, such as lowering interest rates and buying government bonds.


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