Transcript Russia – The Way Out of The Economic Downturn

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
2

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
3
WEO growth forecast revised down,
mainly due to emerging economies
WEO Real GDP Growth Projections
(percent change from a year earlier)
World
U.S.
Euro
Area
2013
(Oct. 2013)
2.9
1.6
-0.4
2.0
2.5
1.5
3.8
7.6
2013
(Jul. 2013)
3.1
1.7
-0.6
2.0
2.5
2.5
5.6
7.8
2014
(Oct. 2013)
3.6
2.6
1.0
1.2
2.5
3.0
5.1
7.3
2014
(Jul. 2013)
3.8
2.7
0.9
1.2
3.2
3.3
6.3
7.7
Source: IMF, World Economic Outlook.
Japan
Brazil
Russia
India
China
4
Outlook for Asia
5
Asia: Changes in Real GDP at Market Prices
Australia,
Japan & New
Zealand
East Asia
(excl. China)
ASEAN
1
China
2012:Q2
2012:Q3
2012:Q4
2013:Q1
2013:Q2
Year over year
2012:Q2
2012:Q3
2012:Q4
2013:Q1
2013:Q2
2012:Q2
2012:Q3
2012:Q4
2013:Q1
2013:Q2
Quarter over quarter (SAAR)
2012:Q2
2012:Q3
2012:Q4
2013:Q1
10
8
6
4
2
0
-2
2012:Q2
2012:Q3
2012:Q4
2013:Q1
2013:Q2
(In percent)
India
2
Sources: CEIC Data Company Ltd.; Haver Analytics; and IMF staff calculations.
includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
2 India's GDP is at factor cost
1 ASEAN
6
Cumulative Equity and Bond Flows
Change in Exchange Rates and Reserves
(% of starting allocation)
(May to Latest; in percent)
Change in Bilateral Exchange Rate (US$:NC)
18
Cumulative flow, Sep 2012
- 2013 May 22
16
14
Cumulative flow since
2013 May 22
12
10
8
6
4
2
5
Korea
China
0
Taiwan POC
New
Zealand
Malaysia
-5
Philippines
Thailand
Australia
-10
Indonesia
India
-15
Philippines
India
Thailand
Malaysia
China
Korea
Hong Kong SAR
Singapore
Taiwan POC
Indonesia
0
-20
-15
-10
-5
0
5
10
Change in Reserves
Exchange rate as of October 15, 2013.
Reserves as of September, August (New Zealand), June (China)
7
Asia: Real GDP Growth
( year on year percent change)
2012
2013
2014
Asia
5.1
5.1
5.3
Advanced
Asia
2.3
2.1
1.5
Japan
2.0
2.0
1.2
East Asia
6.6
6.7
6.6
China
7.7
7.6
7.3
Korea
2.0
2.8
3.7
3.5
4.0
5.2
India
3.2
3.8
5.1
ASEAN
5.7
4.9
5.3
10
Indonesia
6.2
5.3
5.5
8
Malaysia
5.6
4.7
4.9
6
South Asia
Asia: Real GDP Growth
(Central forecast and selected confidence)
50 percent confidence interval
70 percent confidence interval
Central
4
Philippines
6.8
6.8
6.0
2
Singapore
1.3
3.5
3.4
0
Thailand
6.5
3.1
5.2
Vietnam
5.2
5.3
5.4
-2
2009
2010
2011
2012
2013
2014
Sources: IMF, World Economic Outlook; and IMF staff estimates.
8
Economic Policy Implications
9
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
10
Policy Challenges for EM and Developing
Economies: What needs to be done?
No one-size-fits-all !
 Ensure solid macro fundamentals – 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
11

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, somewhat lower
growth
• Asia: implement structural reforms to boost long-term growth
(infrastructure, finance)
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Thank You!
Markus Rodlauer
Deputy Director, China Mission Chief
IMF, Asia and Pacific Department
December 2013