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) 2.91.6-0.42.02.51.53.87.6 2013 (Jul. 2013) 3.11.7-0.62.02.5 5.67.8 2014 (Oct. 2013) 3.62.61.01.22.53.05.17.3 2014 (Jul. 2013) 3.82.70.91.23.23.36.37.7 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

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8. 8 Asia: Real GDP Growth ( year on year percent change) 201220132014 Asia5.1 5.3 Advanced Asia2.32.11.5 Japan2.0 1.2 East Asia6.66.76.6 China7.77.67.3 Korea2.02.83.7 South Asia3.54.05.2 India3.23.85.1 ASEAN5.74.95.3 Indonesia6.25.35.5 Malaysia5.64.74.9 Philippines6.8 6.0 Singapore1.33.53.4 Thailand6.53.15.2 Vietnam5.25.35.4

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