The Asian Development Bank (ADB) says emerging East Asian economies could bounce back to strong growth next year.
ADB said in its Asia Economic Monitor report that the sharp dip in growth in 2009 may well reverse strongly in larger East Asian countries where major fiscal packages were brought in to combat the downturn. This particularly applies to the People’s Republic of China, which currently has a $585 billion (£354 billion) stimulus package in place.
Positive prospects for the Chinese economy were also highlighted by the International Monetary Fund (IMF), who released a report yesterday congratulating the authorities in the country for their “rapid and vigorous policy response” to the crisis. The authors of the report said, despite its already significant fiscal boost, the country still had room to increase its economic stimulus measures due to the low level of public debt.
Jong-Wha Lee, chief economist at ADB, says because of global economic weakness any recovery would be “tentative” and monetary and fiscal policy needs to remain accommodating until the recovery gains “substantial traction”.