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Five Years After GFC Economic Outlook and Policy Challenges Markus Rodlauer Deputy Director, China Mission Chief IMF, A

Five Years After GFC Economic Outlook and Policy Challenges Markus Rodlauer Deputy Director, China Mission Chief IMF, Asia and Pacific Department December 2013. World Economic Outlook. Global growth still weak, with risks on the downside.

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Five Years After GFC Economic Outlook and Policy Challenges Markus Rodlauer Deputy Director, China Mission Chief IMF, A

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  1. Five Years After GFC Economic Outlook and Policy Challenges Markus Rodlauer Deputy Director, China Mission Chief IMF, Asia and Pacific Department December 2013

  2. World Economic Outlook

  3. Global growth still weak, with risks on the downside • Slightly slower growth in 2013 than last year,with modest pick up in 2014 • Shifting cyclical positions • Weaker prospects in major emerging market economies • Stabilizing Euro Area • Expansion in the United States • Downside risks still dominate • Crisis risks from AEs lowered, but further policy actions needed • New risks from growth slowdown in EMs • Financial market volatility may return

  4. WEO growth forecast revised down, mainly due to emerging economies WEO Real GDP Growth Projections (percent change from a year earlier) Source: IMF, World Economic Outlook.

  5. Outlook for Asia

  6. Growth has slowed across much of Asia …

  7. … and Asia was not spared from the re-pricing of financial assets

  8. Still, Asia remains the global growth leader Asia: Real GDP Growth ( year on year percent change)

  9. Economic Policy Implications

  10. Policy Challenges for Advanced Economies: What needs to be done? • Euro Area:Banking repair; banking union; structural reforms • Japan:Medium-term fiscal consolidation plan (right speed; measures); structural reforms • US:Reduce fiscal uncertainty; monetary policy communication

  11. Policy Challenges for EM and Developing Economies: What needs to be done? • No one-size-fits-all ! • Ensure solidmacrofundamentals – fiscal positions (space), monetary policy frameworks • Contain excessive leverage - (macro)prudential • Accelerate structural reforms – supply bottlenecks (infrastructure), rebalancing, finance, prices, …. • Let exchange rate adjust in response to shifts in capital flows; capital flow management measures and intervention in certain circumstances

  12. Recap • Global growth subdued and dynamics changing • Slowdown in emerging markets • Gradual pickup in advanced economies • Downside risks continue to dominate • Economic policy agenda • AEs: credible medium-term fiscal frameworks, repair financial systems, structural reforms (EU, Japan) • EMs: prepare for monetary policy normalization, somewhatlower growth • Asia: implement structural reforms to boost long-term growth (infrastructure, finance)

  13. Thank You! Markus Rodlauer Deputy Director, China Mission Chief IMF, Asia and Pacific Department December 2013

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