The International Monetary Fund ((IMF) said last week that Sri Lanka was among some countries that have shown an improved economic climate and outlook.
Speaking to reporters in Washington on Saturday, Anoop Singh, Director, Asia and Pacific Department of the IMF, said economic activity has accelerated in many of Asia's low-income countries, thanks to higher external demand, strong investment in the commodities sector, and also, accommodative macroeconomic policies. “We are seeing in some countries that have been supported by IMF programs a markedly improved outlook, such as in Sri Lanka and Mongolia,” he said in releasing the fund’s regional outlook for Asia. He said Asia's strong performance since the global financial crisis has continued unabated so far this year. “The outlook for the global economy in many ways is better than was expected some months ago. There are new downside risks globally, but these are not new.”
Activity in Asia has proceeded above trend in almost all economies in the first half of the year with a key point being that private domestic demand has picked up. “This is still fueled in many cases by still accommodative policy conditions but also in the first half of this year by very strong export growth. We expect during the second half of the year that activity will moderate somewhat to a more sustainable pace,” he said. In China, output growth has somewhat moderated recently, owing to credit growth that is being slowed and the effects of measures to cool property markets. Private domestic demand has continued to support growth, importantly, in India and Indonesia. Export-dependent Asian economies, will continue to benefit from export growth that remains strong.
He said they expect Asia to continue to lead the global recovery, growing overall by eight % this year and still by a sustainable 7 % next year. China and India will continue to lead the region's growth with growth this year at about 10.5 % and a little above 9.5 %, respectively.
He said sustaining robust growth in Asia will require, as ‘we have said in many papers in the last few weeks’, continued progress with rebalancing growth toward domestic demand, a process that is already happening in many countries in Asia.