Fri, Apr 11 2008, 15:17 GMT
http://www.djnewswires.com/eu
IMF: Asian Countries Should Prepare Crisis Contingency Plans
WASHINGTON -(Dow Jones)- Asian countries should prepare "contingency plans" in case the global financial crisis spills over into the region, an official from the International Monetary Fund said Friday.
"Given the risks that we're seeing in global financial markets, I think monetary and regulatory authorities around the region need to monitor financial institutions and financial markets carefully and think about how they would cope with further pressures there," said David Burton, director of the IMF's Asia and Pacific Department.
Preparations should be made for providing liquidity and bank capitalization, while regulatory frameworks should also be reviewed over the medium term, he said.
Asia hasn't been immune to the financial market turmoil, but so far there haven't been any signs of a "significant credit squeeze," he said.
The economic outlook remains "quite favorable," he said, but risks are "tilted" to the downside.
The Chinese government's upward revision Thursday of its 2007 growth estimate to 11.9% from 11.4% will likely alter the IMF's forecasts for 2007 and 2008 for both China and the region a little, but "won't change the overall picture," he said.
The IMF's growth estimate for China, released earlier in the week, is 11.4% for 2007 and 9.3% for 2008. The 2008 forecast was slashed by 0.7 percentage points from the fund's January estimate. The IMF expects emerging Asian countries to grow 7.6% in 2008 and 7.9% in 2009.
"At the same time that growth is starting to slow, inflation is rising significantly across the region," said Burton, adding that the price pressures constrain how much central banks can ease.
By Tom Barkley
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Asian countries should prepare "contingency plans" in case the global financial crisis spills over into the region, an official from the International Monetary Fund said Friday.
"Given the risks that we're seeing in global financial markets, I think monetary and regulatory authorities around the region need to monitor financial institutions and financial markets carefully and think about how they would cope with further pressures there," said David Burton, director of the IMF's Asia and Pacific Department.
Preparations should be made for providing liquidity and bank capitalization, while regulatory frameworks should also be reviewed over the medium term, he said.
Asia hasn't been immune to the financial market turmoil, but so far there haven't been any signs of a "significant credit squeeze," he said.
The economic outlook remains "quite favorable," he said, but risks are "tilted" to the downside.
The Chinese government's upward revision Thursday of its 2007 growth estimate to 11.9% from 11.4% will likely alter the IMF's forecasts for 2007 and 2008 for both China and the region a little, but "won't change the overall picture," he said.
The IMF's growth estimate for China, released earlier in the week, is 11.4% for 2007 and 9.3% for 2008. The 2008 forecast was slashed by 0.7 percentage points from the fund's January estimate. The IMF expects emerging Asian countries to grow 7.6% in 2008 and 7.9% in 2009.
"At the same time that growth is starting to slow, inflation is rising significantly across the region," said Burton, adding that the price pressures constrain how much central banks can ease.
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