IMF expecting Asian economies to grow by 6 percent
(10 April 2013 – Japan) International Monetary Fund (IMF) Chief Christine Lagarde has hailed the Bank of Japan (BoJ)’s unprecedented monetary policy boost.
Lagarde said the US$1.4 trillion (A$1.3 trillion) stimulus would help strengthen the advanced economies, saying growth in countries such as the United States was gaining speed.
'Monetary policies, including unconventional measures, have helped prop up the advanced economies, and in turn, global growth,' Christine Lagarde told a forum in south China.
'The reforms just announced by the Bank of Japan are another welcome step in this direction,' she said. 'There is, however, a limit to how effectively monetary policy can continue to shoulder the lion's share of this effort.'
Central banks still need to heed broken balance sheets that impede lending and plan for and guard against uncertainties arising from any policy change, the IMF chief said.
Lagarde said the IMF expected Asian economies to grow by nearly 6 percent this year, 'an enviable performance by any measure', as resilient domestic demand and accommodative policies power the region.
She said the impressive growth rate is customary for Asia, which has accounted for two-thirds of global growth in the last five years since the financial crisis struck.
Asia's buoyancy has rubbed off on the rest of the world.
'A substantial portion of the global economy looks better today than it did last year,' Lagarde said. 'And we are beginning to see momentum pick up in the United States.'
Japan stunned investors on Thursday by unleashing the world's most intense burst of monetary stimulus, which will pump US$1.4 trillion into its economy in under two years. It hopes the shock therapy will end two decades of stagnation.
But the move is a huge gamble. It heavily exposes the BoJ to Japan's mountain of public debt and carries the potential for big losses if inflation spikes and investors lose faith in its viability.
'Monetary policies, including unconventional measures, have helped prop up the advanced economies, and in turn, global growth,' Christine Lagarde told a forum in south China.
'The reforms just announced by the Bank of Japan are another welcome step in this direction,' she said. 'There is, however, a limit to how effectively monetary policy can continue to shoulder the lion's share of this effort.'
Central banks still need to heed broken balance sheets that impede lending and plan for and guard against uncertainties arising from any policy change, the IMF chief said.
Lagarde said the IMF expected Asian economies to grow by nearly 6 percent this year, 'an enviable performance by any measure', as resilient domestic demand and accommodative policies power the region.
She said the impressive growth rate is customary for Asia, which has accounted for two-thirds of global growth in the last five years since the financial crisis struck.
Asia's buoyancy has rubbed off on the rest of the world.
'A substantial portion of the global economy looks better today than it did last year,' Lagarde said. 'And we are beginning to see momentum pick up in the United States.'
Japan stunned investors on Thursday by unleashing the world's most intense burst of monetary stimulus, which will pump US$1.4 trillion into its economy in under two years. It hopes the shock therapy will end two decades of stagnation.
But the move is a huge gamble. It heavily exposes the BoJ to Japan's mountain of public debt and carries the potential for big losses if inflation spikes and investors lose faith in its viability.
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