Asia could enjoy a rapid economic recovery next year once the rest of the world claws out of recession, IMF managing director Dominique Strauss-Kahn said yesterday.
“Once the world economy regains its footing a rapid recovery is possible,” he said, predicting Asian economic growth of more than 5 percent next year, almost twice the pace expected this year.
Asian countries cannot begin to recover until the rest of the global economy escapes from the current “major downturn” because they rely heavily on exports, the head of the IMF said.
Asia was likely to post economic growth of 2.7 percent this year, with the region’s developing countries seeing 5.5 percent expansion, Strauss-Kahn said, speaking to an online briefing from Washington.
“But it’s very uncertain and a worse outcome cannot be ruled out,” he said.
Once the US and European economies start to rebound, however, some Asian economies “may recover very fast,” he said.
“Some Asian economies are really dynamic. They have a lot of resources. They have very strong fundamentals,” Strauss-Kahn said.
Interest rate cuts as well as government spending would help spur the recovery in Asia, whose banks are not suffering problems on the same scale as their US and European peers, Strauss-Kahn said.
He said certain countries in the region, including China, have more room for fiscal measures to stimulate their economies.
China would find it “very challenging” to meet its target of 8 percent economic growth this year although it is not impossible, Strauss-Kahn said, reiterating the IMF’s own forecast for 6.7 percent Chinese growth this year.
China’s economy faces a lot of “painful changes” as a result of the global slowdown, he warned.
“But those changes are obviously for the good and in the interest of the people of China. It has to be done,” he said.
In the longer term China and the rest of Asia need to reduce their dependence on exports and stimulate domestic demand, but this is a difficult task that will take some time to achieve, he said.
The IMF chief also warned countries not to turn to protectionism during the economic slump, saying: “Beggar thy neighbor policies will never give a good result.”
Proponents of free trade fear that the global economic crisis and the subsequent wave of job cuts could prompt governments to pursue policies that favor national companies and reduce global trade flows.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it would boost equipment capital expenditure by up to 16 percent for this year to cope with strong customer demand for artificial intelligence (AI) applications. Aside from AI, a growing demand for semiconductors used in the automotive and industrial sectors is to drive ASE’s capacity next year, the Kaohsiung-based company said. “We do see the disparity between AI and other general sectors, and that pretty much aligns the scenario in the first half of this year,” ASE chief operating officer Tien Wu (吳田玉) told an
RSS