Asia will continue to lead global economic growth over the next two years even as it grapples with risks including inflation, turmoil in the Middle East and the effects of Japan’s tsunami, the IMF said yesterday.
“Robust” regional growth of close to 7 percent will be fueled by exports and domestic demand, said Anoop Singh, director of the Washington-based body’s Asia and Pacific department, in the twice-yearly report. Asia’s overall economy grew 8.3 percent last year.
Growth will be driven by economic powerhouses China and India.
The IMF forecasts China’s economy will grow 9.5 percent while India will expand by about 8 percent over the next two years.
However, the fund warned of “pockets of overheating” across the region as consumer price inflation rose to 4.5 percent in February.
Higher oil and food prices are starting to feed into broader inflation and will affect the poor, the fund said. Inflation is also being driven by low interest rates in many Asian countries.
The IMF forecasts inflation will continue rising this year before easing modestly next year.
Earlier this week, the Asian Development Bank warned that surging food prices threaten to push millions more people into poverty and shave up to 1.5 percentage points off regional economic growth.
The IMF said turmoil in the Middle East and North Africa could also pose a risk by causing further spikes in oil prices, which would shave economic growth in countries reliant on oil imports, such as China and Japan.
Asian economies could also be affected if higher oil prices result in a global slowdown, which would result in a drop in demand from wealthy countries for their exports.
The IMF cut its forecast for Japan’s economic growth this year from 1.6 percent to 1.4 percent because of the March 11 earthquake, tsunami and subsequent nuclear disaster. Economic growth is expected to pick up to 2.1 percent next year as a result of increased spending on reconstruction.
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
Protectionism: US trade chief Katherine Tai said the hikes would help to counter unfair trade practices from China, while boosting domestic clean energy investments US Trade Representative Katherine Tai (戴琪) defended stiff tariff hikes against countries such as China, saying that paired with investment, they were a “legitimate and constructive” tool for reinvigorating domestic industries. Tai’s comments come a week after sharp tariff increases on Chinese electric vehicles (EVs), EV batteries and solar cells took effect — with levies down the line on other products also recently finalized. The latest moves targeting US$18 billion in Chinese goods come weeks before next month’s US presidential election, with Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies. In an interview on Thursday
RSS