World Economy

IMF Calls for Boosting Resilience in Asia-Pacific

IMF Calls for Boosting Resilience in Asia-Pacific IMF Calls for Boosting Resilience in Asia-Pacific

The International Monetary Fund (IMF) expects slower economic growth in China to drag Singapore’s 2015 growth down “modestly” to below the 3.0 percent the IMF had earlier projected.

Singapore’s on-going economic restructuring will also continue to be contractionary, making a downward revision in the IMF growth forecast almost a foregone conclusion, said the IMF’s local representative Geoffrey Heenan, BT Invest reported.

However, he said that this restructuring is good for Singapore’s long-term GDP growth, and in line with the policy prescription the IMF makes in its latest assessments of the Asia-Pacific economies.

He also disclosed that the agency’s country report on Singapore is likely to come out on Tuesday.

In its report entitled “Regional Economic Outlook (Asia and Pacific) - Stabilizing and Outperforming Other Regions”, the IMF said governments in the region have got their monetary and fiscal policy broadly right, but must give top priority to “boosting resilience and potential growth through country-specific structural reforms”. Further delays in structural reforms could hold back growth, it warned.

Even if the IMF trims its 2015 GDP growth forecast for Singapore, the revised number is likely to remain in the upper range of Singapore’s official projection of between 2.0 and 4.0 percent.

The outlook in the IMF’s report for the region put Singapore’s growth for this year at 3.0 percent, up from an actual growth of 2.9 percent in 2014. Singapore’s GDP is tipped to continue to grow 3.0 percent in 2016.

China’s GDP growth, at 7.4 percent last year, is projected to slip to 6.8 percent this year and to 6.3 percent next year, as the country continues to make adjustments in its real estate sector, shadow banking and local government finances.

The IMF’s director for the Asia and Pacific Changyong Rhee, told reporters: “This slowdown is largely policy-induced and welcome, as it will contain vulnerabilities and promote a more sustainable growth path.”

The agency estimates that each percentage point dip in China’s GDP growth will cost economies in the region 0.3 to 0.5 percentage point in growth.