“The World Bank said policy makers in Asia’s emerging economies have room to provide more fiscal stimulus as China’s slowdown drags the region’s growth to an estimated 11-year low in 2012.
Growth in developing East Asia, which excludes Japan and India, will probably ease to 7.2 percent from 8.3 percent in 2011, the Washington-based lender said in a report today. That is the slowest pace since 2001, according to World Bank data, and lower than a forecast in May of 7.6 percent.
The International Monetary Fund is set to reduce its global forecast for this year tomorrow at an annual meeting in Tokyowhere officials will tackle a slowdown triggered by Europe’s sovereign-debt crisis. Central banks are stepping up efforts to protect the worldwide recovery, with the U.S. expanding monetary easing, the Bank of Japan boosting its asset purchases and the Bank of Korea forecast to cut interest ratesthis week.
“On the monetary side, interest rates are already quite low and liquidity is relatively high in many other countries,” Bert Hofman, World Bank chief economist for East Asia and the Pacific, said in an interview with Bloomberg Television today. “On the fiscal side, there is clear scope, deficits are relatively low and debts are not very high.”
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