The IMF said Asian central banks generally have room to lower interest rates to support domestic demand and offset the impact of the escalating global trade war, with the region in much stronger shape than before the Asian financial crisis.
Inflation in the region is at par or even below central banks’ target ranges, which should allow more monetary easing, IMF Asia and Pacific Department director Krishna Srinivasan said yesterday.
While that could weaken currencies, especially if rates in the US stay higher for longer, “what we are advising countries is to let the exchange rate be the shock absorber, and let monetary policy provide you space you need to adjust” to the tariff shock, he said.
Photo: EPA-EFE
The recommendation comes as US President Donald Trump’s tariffs threaten to slow the global economy, with the export-driven Asian region set to be among the hardest hit. The IMF expects Asia’s economy to grow just 3.9 percent this year and 4 percent next year, as it deals with a “double whammy” from weaker external demand and higher US tariffs, Srinivasan said.
That represents a cumulative downgrade of 0.8 percentage points from the IMF’s earlier forecasts, its sharpest adjustment since the COVID-19 pandemic, he said, adding that the new forecasts face “significant downside risks,” depending on the outcome of trade negotiations with the US.
On the plus side, the region’s fundamentals are “much, much better” than during the 1997 to 1998 Asian financial crisis, when the IMF bailed out Indonesia, South Korea and Thailand, Srinivasan said.
Differences include credible policy frameworks, independent central banks and less currency mismatch in their balance sheets, he added.
The IMF urged Asia to look toward its domestic economy to drive growth, and undertake the necessary structural reforms to stimulate consumption and investment that remain soft compared with pre-COVID-19 levels.
Lower borrowing costs should help bolster demand and lift countries out of deflationary territory, such as China and Thailand. Any fiscal support should be “targeted and time-bound” since budget deficits remain high post-COVID-19, Srinivasan said.
Real estate agent and property developer JSL Construction & Development Co (愛山林) led the average compensation rankings among companies listed on the Taiwan Stock Exchange (TWSE) last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) finished 14th. JSL Construction paid its employees total average compensation of NT$4.78 million (US$159,701), down 13.5 percent from a year earlier, but still ahead of the most profitable listed tech giants, including TSMC, TWSE data showed. Last year, the average compensation (which includes salary, overtime, bonuses and allowances) paid by TSMC rose 21.6 percent to reach about NT$3.33 million, lifting its ranking by 10 notches
Popular vape brands such as Geek Bar might get more expensive in the US — if you can find them at all. Shipments of vapes from China to the US ground to a near halt last month from a year ago, official data showed, hit by US President Donald Trump’s tariffs and a crackdown on unauthorized e-cigarettes in the world’s biggest market for smoking alternatives. That includes Geek Bar, a brand of flavored vapes that is not authorized to sell in the US, but which had been widely available due to porous import controls. One retailer, who asked not to be named, because
SEASONAL WEAKNESS: The combined revenue of the top 10 foundries fell 5.4%, but rush orders and China’s subsidies partially offset slowing demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) further solidified its dominance in the global wafer foundry business in the first quarter of this year, remaining far ahead of its closest rival, Samsung Electronics Co, TrendForce Corp (集邦科技) said yesterday. TSMC posted US$25.52 billion in sales in the January-to-March period, down 5 percent from the previous quarter, but its market share rose from 67.1 percent the previous quarter to 67.6 percent, TrendForce said in a report. While smartphone-related wafer shipments declined in the first quarter due to seasonal factors, solid demand for artificial intelligence (AI) and high-performance computing (HPC) devices and urgent TV-related orders
MINERAL DIPLOMACY: The Chinese commerce ministry said it approved applications for the export of rare earths in a move that could help ease US-China trade tensions Chinese Vice Premier He Lifeng (何立峰) is today to meet a US delegation for talks in the UK, Beijing announced on Saturday amid a fragile truce in the trade dispute between the two powers. He is to visit the UK from yesterday to Friday at the invitation of the British government, the Chinese Ministry of Foreign Affairs said in a statement. He and US representatives are to cochair the first meeting of the US-China economic and trade consultation mechanism, it said. US President Donald Trump on Friday announced that a new round of trade talks with China would start in London beginning today,
RSS