The IMF warned Asia yesterday of potential spillovers from the European debt crisis, which is unfolding a decade after the region underwent its own financial turmoil.
“Adverse developments in Europe could disrupt global trade, with implications for Asia given the still important role of external demand,” IMF deputy managing director Naoyuki Shinohara told a forum in Singapore.
On the financial front, he said major credit problems could result in a “significant spillover” through funding channels, especially where banks depend on wholesale funding.
The crisis has also increased the potential for uncertainty and volatility in the outlook for capital flows, Shinohara said at the forum hosted by the Monetary Authority of Singapore.
He said Asia’s growth prospects, together with low interest rates in major economies, would likely attract more capital that could “lead to risks of overheating in some economies if appropriate policy action is not taken.
“On the other hand, further increases in global risk aversion could see capital flows change direction quickly,” he said.
Shinohara said Asian governments must be wary of the potential risks from the European crisis and be prepared to take appropriate action.
“The key will be for policymakers to keep an eye on the bigger picture and be ready to act swiftly as developments unfold,” he said. “With Asia’s economic muscle growing, the policy choices made in this region will have an important impact on the global economy,” he said.
Greece is at the epicenter of a mounting debt crisis that threatens to spread across the eurozone and has pulled down the currency to four-year lows against the dollar and eight-year lows against the yen.
Shinohara said there was a risk that sovereign debt problems being experienced in some eurozone countries could spill over to others. He said the strong fiscal position of most Asian economies provided the “space” to respond flexibly to the European crisis.
“In the event of spillovers from Europe, there is ample room in most Asian economies to pause the withdrawal of fiscal stimulus,” he said.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source