The IMF projects the economies of the US, Japan and euro zone all will shrink next year in a simultaneous decline in the world’s biggest industrial powers, according to a fund staffer who cited revised forecasts.
The US economy will contract 0.7 percent, Japan will recede 0.2 percent and the euro area will fall 0.5 percent, said an IMF staffer who reviewed the expected revisions to the fund’s World Economic Outlook.
A month ago, the IMF predicted all three would expand — 0.1 percent in the US, 0.5 percent in Japan and 0.2 percent in the euro zone.
The changes expected to be released yesterday come a month after the Washington-based fund already slashed expectations for world growth to reflect the impact of the financial crisis.
As the credit crunch widens, the reversal of growth in major developing countries is spreading to poorer nations, increasing demand for IMF loans.
“While a modest recovery is expected to begin in the second half of 2009, this outlook is exceptionally uncertain and additional downside risks are evident,” IMF first deputy managing director John Lipsky said in a statement on Wednesday.
Global growth will be 2.2 percent next year, down from 3.7 percent this year, the staffer said. On Oct. 7, the IMF said the world economy would expand by 3 percent next year — lower than its forecast of 3.9 percent in July.
The IMF has said that a growth rate of 3 percent or less is “equivalent to a global recession.”
In emerging and developing economies, GDP next year will grow 5.1 percent, less than the 6.1 percent expansion the fund predicted last month, the staffer said.
China’s growth will measure 8.5 percent next year, weaker than the 9.3 percent forecast a month ago, the staffer said.
Policy makers in Asia should prepare for the possibility of a “sharp slowing” of economic growth in the region as the global financial crisis widens, the No. 2 official at the IMF said on Wednesday.
“Asian authorities will need to remain vigilant to spillovers from the global turmoil and be prepared to respond quickly and flexibly to a sharp slowing of domestic activity,” said John Lipsky, the IMF’s first deputy managing director, in an e-mailed statement after talks with finance ministers in Trujillo, Peru.
Latin American policy makers should also “remain on high alert,” he said.
Lipsky cautioned that a recovery next year wasn’t a certainty.
“The financial crisis has spread to emerging economies,” he said.
“While a modest recovery is expected to begin in the second half of 2009, this outlook is exceptionally uncertain and additional downside risks are evident,” Lipsky said.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so
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