Director of the IMF of the Department of Asia and the Pacific Krishna Srinivasan | Photo credit: Elizabeth Frantz/Reuters
The International Monetary Fund said that Asian Central Banks generally have space to reduce interest rates to support domestic demand and compensate for the impact of the intense global commercial war, with the region in a much stronger way than before the Asian financial crisis.
Inflation in the region is in the target ranges of the central torque or noise of the central banks, which should allow more monetary asing, the director of the IMF of the Department of Asia and the Pacific, Krishna Srinivasan, said to Haslinda Amin de Bloomberg Television.
While that could weaken the currencies, especially if the rates in the United States remain higher for longer, “what we are advice from countries is to let the exchange are the shock absorber and let the monetary policy provide space that it needs to adjust.
The recommendation occurs when the rates of the president of the United States, Donald Trump, threaten to delay the global economy, with the Asian region of export exports that is among the most affected. The IMF expects Asia’s economy to grow only 3.9% this year and 4% in 2026, since it suffers a “double blow” of Waker’s external demand and the highest rates in the United States, Srinivasan said.
They represent an accumulated reduction or 0.8 percentage points of the previous forecasts of the fund, their most acute adjustment as a pandemic, he said. The new forecasts also face “significant declines”, depending on the result of commercial negotiations with the United States, he said.
On the positive side, he said that the foundations of the foundation of the region are “much, much better” than the duration of the Asian financial crisis of 1997-1998, when the IMF rescued Indonesia, South Korea and Thailand. Differences include credible policies, independent central banks and less mismatch of currencies in their balances, said Srinivasan.
The IMF urged Asia to look towards its domestic economy to boost growth and undertake the structural reforms necessary to stimulate the consumption and investment that remain soft compared to pre-pondemic levels.
The lower indebtedness costs should help reinforce demand and get countries out of the deflacacionales territory, such as China and Thailand. Any fiscal support must be “directed and limited by time” since budget deficits remain high after Covid, said Srinivasan.
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Posted on April 25, 2025