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World Asia suffering "worst recession in living memory"

07:05  22 october  2020
07:05  22 october  2020 Source:   bbc.com

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Asia Pacific is set to recover from its worst recession in living memory , the International Monetary Fund (IMF) says. The good news is that the IMF expects the region to grow by 6.9% in 2021 but this relies on many factors, including the containment of the virus.

The Asia -Pacific region is recovering from its worst recession in living memory . Reflecting worse-than-expected outturns in the second quarter in a few countries, the IMF’s forecast for the region has been downgraded to -2.2 percent in 2020—the worst outcome for this region in living memory .

Asia Pacific is set to recover from its worst recession in living memory, the International Monetary Fund (IMF) says.

  Asia suffering © Getty Images

Growth forecasts for the region have been downgraded again, this time from -1.6% to -2.2% for this year.

However, the glimmer of hope is for a bounceback of almost 7% next year, according to the IMF.

China will play a big part in the region's growth next year, with its latest data showing continued recovery from the downturn caused by the virus.

But there are still many black clouds on the horizon as countries, including India, the Philippines and Malaysia, continue to battle with Covid-19 infections.

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South Asia and Far East Wannabes. PPRuNe Worldwide. It was people like you who caused the worst recession in living memory . i am so sorry. me me me me - i can only apologise for causing the worst recession in living memory !!

The European Union’s 27 heads of government will hold a videoconference to discuss the next steps in tackling the coronavirus pandemic after stringent lockdowns shuttered factories and halted travel, pitching the world’s largest trading bloc into the worst recession in living memory .

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"The scars will be deep," said the IMF, pointing to lower investment which will have a knock-on effect by the middle of the decade.

US-China tensions

Not only are economies in the region dealing with the fallout from the pandemic, but they are also affected by the US-China trade war, and the growing hostilities between the two economic superpowers.

Speaking to BBC's Asia Business Report on Thursday, Jonathan Ostry, the IMF's acting director for Asia and Pacific, said: "This is something, for a very export-orientated region, that is going to be a big risk going forward.

"We worry about decoupling of major technology hubs - not just in China and the US but more broadly, which would have the affect of diminishing hi-tech trade leading to inefficient production."

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Growth in domestic demand in the PRC is stimulating a recovery in production and exports in a number of neighboring countries, while Japan appears to be over the worst and poised for a rally in the short term. [ ] during the worst recession in living memory [ ] – and the Spanish economy is suffering .

[ ] during the worst recession in living memory [ ] – and the Spanish economy is suffering . Growth rates in emerging economies in Asia and other areas slowed rapidly, and the global economy was beginning to see serious synchronized global slowdowns.

Earlier this week, China released its data for the July to September quarter which showed economic growth of 4.9% compared to the same quarter last year.

China is seen as "a rare positive figure in a sea of negatives" by the IMF.

Drawn-out recovery

The good news is that the IMF expects the region to grow by 6.9% in 2021 but this relies on many factors, including the containment of the virus.

"With the right policies and international support when needed, Asia's engines can work together again and power the region ahead," Mr Ostry said.

One of the challenges will be diversifying Asia's economies away from an over-reliance on exports, which the IMF calls "a work in progress".

Economic recovery will be 'unpredictable and uneven' RBA warns as it models 50pc property price fall .
More Australians could go into "negative equity" if the COVID-led recession leads to a big property price fall, according to the Reserve Bank.In a speech about major risks to Australia's financial stability on Tuesday evening, RBA assistant governor Michele Bullock warned more businesses would go under and this would have a negative impact on bank balance sheets.

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