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Five Years After GFC Economic Outlook and Policy Challenges Markus Rodlauer Deputy Director, China Mission Chief IMF, Asia and Pacific Department December.

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Presentation on theme: "Five Years After GFC Economic Outlook and Policy Challenges Markus Rodlauer Deputy Director, China Mission Chief IMF, Asia and Pacific Department December."— Presentation transcript:

1 Five Years After GFC Economic Outlook and Policy Challenges Markus Rodlauer Deputy Director, China Mission Chief IMF, Asia and Pacific Department December 2013

2 World Economic Outlook 2

3  Slightly slower growth in 2013 than last year, with modest pick up in 2014  Shifting cyclical positions  Weaker prospects in major emerging market economies  Stabilizing Euro Area  Expansion in the United States  Downside risks still dominate  Crisis risks from AEs lowered, but further policy actions needed  New risks from growth slowdown in EMs  Financial market volatility may return 3

4 WorldU.S. Euro AreaJapanBrazilRussiaIndiaChina 2013 (Oct. 2013) (Jul. 2013) (Oct. 2013) (Jul. 2013) WEO Real GDP Growth Projections (percent change from a year earlier) Source: IMF, World Economic Outlook. WEO growth forecast revised down, mainly due to emerging economies 4

5 Outlook for Asia 5

6 6

7 7

8 8 Asia: Real GDP Growth ( year on year percent change) Asia Advanced Asia Japan East Asia China Korea South Asia India ASEAN Indonesia Malaysia Philippines Singapore Thailand Vietnam

9 Economic Policy Implications 9

10  Euro Area: Banking repair; banking union; structural reforms  Japan: Medium-term fiscal consolidation plan (right speed; measures); structural reforms  US: Reduce fiscal uncertainty; monetary policy communication  Euro Area: Banking repair; banking union; structural reforms  Japan: Medium-term fiscal consolidation plan (right speed; measures); structural reforms  US: Reduce fiscal uncertainty; monetary policy communication Policy Challenges for Advanced Economies: What needs to be done? 10

11 Policy Challenges for EM and Developing Economies: What needs to be done? No one-size-fits-all !  Ensure solid macro fundamentals – fiscal positions (space), monetary policy frameworks  Contain excessive leverage - (macro)prudential  Accelerate structural reforms – supply bottlenecks (infrastructure), rebalancing, finance, prices, ….  Let exchange rate adjust in response to shifts in capital flows; capital flow management measures and intervention in certain circumstances No one-size-fits-all !  Ensure solid macro fundamentals – fiscal positions (space), monetary policy frameworks  Contain excessive leverage - (macro)prudential  Accelerate structural reforms – supply bottlenecks (infrastructure), rebalancing, finance, prices, ….  Let exchange rate adjust in response to shifts in capital flows; capital flow management measures and intervention in certain circumstances 11

12  Global growth subdued and dynamics changing Slowdown in emerging markets Gradual pickup in advanced economies Downside risks continue to dominate  Economic policy agenda AEs: credible medium-term fiscal frameworks, repair financial systems, structural reforms (EU, Japan) EMs: prepare for monetary policy normalization, somewhat lower growth Asia: implement structural reforms to boost long-term growth (infrastructure, finance) 12

13 Thank You! Markus Rodlauer Deputy Director, China Mission Chief IMF, Asia and Pacific Department December 2013


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