Asia stimulus must continue on rebound: IMF

South Korea's economy expanded 2.9 percent in the third quarter, the fastest pace in seven years, and Japan's manufacturers increased production in September for a seventh month, recent reports showed.

“Asia is rebounding fast from the depths of the global crisis,” the IMF said. “The rebound in economic activity has been fastest in the export-dependent Asian economies that were hit most severely at the end of 2008.”

The IMF raised its forecast this month for world economic growth in 2010 as more than US$2 trillion in stimulus packages and demand in Asia pull the world economy out its worst recession since World War II. The global economy will expand 3.1 percent, more than a July forecast of 2.5 percent, the fund said Oct. 1.

The lender forecasts China will lead the region, expanding 8.5 percent this year and 9 percent in 2010. India's gross domestic product will gain 5.4 percent and 6.5 percent respectively, the report said. Japan's economy will emerge from this year's recession, when GDP will fall 5.4 percent, to expand 1.7 percent in 2010. Australian GDP will gain 0.7 percent this year and 2 percent in 2010, and New Zealand's economy will expand 2.2 percent after shrinking 2.2 percent this year.

The so-called newly industrialized economies including Hong Kong, South Korea, Singapore and Taiwan will expand between 3.5 percent and 4.3 percent in 2010, after shrinking this year, the fund predicts, helped by a rebound in consumer confidence and “continued buoyancy in exports.” A key challenge facing the region's leaders “will be to devise a way to return to sustained, rapid growth in a new global environment of softer G-7 demand,” the IMF said.

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