Emerging Asia recovering fast - IMF

Harshini PERERA

Emerging Asia is recovering fast from the economic recession compared with the West and a robust growth is expected from Sri Lanka too. The emerging Asia is still firmly leading the global recovery, IMF Sri Lanka and Maldives Resident Representative Dr Koshy Mathai said.

"The IMF projects a 4.2 percent world economy growth for 2011 and the emerging and developing economies in Asia will contribute to it largely with a growth rate of 7.1 percent in 2011," he said at the Asia-Pacific Regional Economic Outlook speech yesterday.

"The recent global recovery has been slow compared to the global recessions in 1970's, 1980's and 1990's.

Therefore many Governments had been giving stimulants for their economies to recover from the recession soon which cannot be continued forever," Mathai said.

The banks in Sri Lanka need to extend many loans to the private sector as the IMF has projected that Sri Lanka is heading for a 7 percent GDP growth next year.

"We havc not seen an immediate need to tighten policies for Sri Lanka as yet.

Therefore, IMF has requested from the Central Bank of Sri Lanka to loosen policies in lending money for the betterment of the economy," he said. Among the low income countries in the Asian region, Sri Lanka has strengthened the recovery from the economic recession and there is a fiscal sustainability initiated by the authorities.

He said the time has come to normalize fiscal and monetary policies in the Asian region and the sustaining growth over the medium term will require continued measures to promote rebalancing including exchange rate appreciation.