IMF urges more rate cuts in Asia

The forecasts were released three weeks ago as part of the IMF’s World Economic Outlook following the IMF spring meeting but the organisation released commentary on the region on Wednesday in its twice-yearly regional economic outlook for Asia and the Pacific.

The IMF said that risks to the outlook were tilted to the downside and relied on a recession-hit global economy stabilising after the credit crisis.

“There are risks that financial strains will become deeper,and that macroeconomic policy support is withdrawn prematurely.

“In this case,the global downturn could continue to deepen. This would make it even more difficult for Asia to recover,” the IMF said.

A second risk,the IMF said,was that corporate losses,which it now believes will remain manageable,could surge due to continued weak demand and tighter financial conditions,thereby hurting banks and leading to higher unemployment.

Another risk was from global deleveraging which could limit the access to external financing for companies and governments.