The International Monetary Fund in its latest economic report April 21 forecast Taiwan’s gross domestic product will expand 6.5 percent in 2010 and 4.8 percent in 2011, against a contraction of 1.9 percent in 2009.
According to the IMF’s “World Economic Outlook,” Taiwan is expected to top Asia’s three other tiger economies in the pace of recovery. Among these peers, Singapore’s GDP growth this year is seen at 5.7 percent, followed by Hong Kong’s 5 percent and South Korea’s 4.5 percent.
As for the global economy, GDP growth in 2010 is now forecast at 4.2 percent, better than the 3.9 percent projected in January. The latest IMF report estimated the world economy will advance 4.3 percent in 2011.
Mainland China, India and other emerging and developing countries will lead the world in shrugging off economic recession. GDP growth in developing Asian nations is forecast to surge to 8.7 percent in 2010 from 6.6 percent in 2009.
The United States will top other developed countries this year, followed by Europe and Japan, the report maintained.
However, the IMF warned that many countries will continue to face public debt problems that could seriously affect the global economy.
Economic improvement has exceeded expectations so far. But the magnitude of recovery in many countries can only be considered mild. This situation underscores the need for planned fiscal stimuli to be fully implemented. Downside risks stemming from fiscal fragilities have come to the fore, it added.
The IMF said Asia will continue to power the global economic comeback. Given their strong growth, these countries’ policy priority would be to exit stimulus measures in a gradual manner.
The report said the debt-to-GDP ratios in advanced economies are expected to exceed 100 percent of GDP in 2014. They need to act to bring these ratios down over the medium term.
The public debt problem in emerging economies is more localized. Many emerging Asian economies entered the crisis with relatively low public debt levels and can afford to maintain an expansionary fiscal stance. But these economies will need to be alert to growing price pressures and financial instability, and allow their currencies to appreciate to combat overheating. (HML-THN)