The Next Phase of Asia’s Economic Growth


By Anoop Singh

(Version in 中文,  日本語 and 한국어)

As the economic recovery has matured across much of Asia, the region has continued to be a driving force in the strengthening global recovery. Yet, recent tragic events—around the globe, and the earthquake and tsunami in Japan—are an all too poignant reminder of the fragility of our economic circumstances and, indeed, life.

Much of this weighs on my mind as I am here in Hong Kong to launch our April 2011 Regional Economic Outlook: Asia and Pacific. While the outlook is by no means gloomy, it is an opportune time to consider how Asia should manage the next phase of growth. Continue reading

Avoiding Another Year of Living Dangerously: Time to Secure Financial Stability


By José Viñals

In various guises, the “Year of Living Dangerously” has been used to describe the global financial crisis, the policy response to the crisis, and its aftermath.

But, we’ve slipped well beyond a year and the financial system is still flirting with danger. Durable financial stability has, so far, proven elusive.

Financial stability risks may have eased, reflecting improvements in the economic outlook and continuing accommodative policies. But those supportive policies—while necessary to restart the economy—have also masked serious, underlying financial vulnerabilities that need to be addressed as quickly as possible. Continue reading

Global Recovery Strengthens, Tensions Heighten


By Olivier Blanchard

The world economic recovery is gaining strength, but it remains unbalanced.

Three numbers tell the story. We expect the world economy to grow at about 4.5 percent a year in both 2011 and 2012, but with advanced economies growing at only 2.5 percent, while emerging and developing economies grow at a much higher 6.5 percent.

On the good news side. Earlier fears of a double dip—which we did not share—have not materialized. Continue reading

Getting the Diagnosis Right: Avoiding a Housing Price Bubble in Hong Kong SAR


By Nigel Chalk

(Version in 中文)

In the past couple of years, Hong Kong has witnessed a sharp increase in property prices. This has led some to claim that the time has come to change Hong Kong’s “Linked Exchange Rate System”.

This represents a misdiagnosis of the current situation and the wrong prescription for Hong Kong.

It is true that the average cost of an apartment in Hong Kong has risen by almost 20 percent in the past year alone. This stands in stark contrast to what our latest World Economic Outlook described as the dismal outlook for real estate markets in the industrial countries.

And, like many countries in the region, Hong Kong has been the destination for an extraordinary amount of global capital over the past two years.

But how much of these trends have been a product of the exchange rate regime? Continue reading

What Drives Inflation in Asia and Why it Matters


By Anoop Singh

(Version in 日本語)

Of all the things policymakers have had to worry about in the past couple of years, inflation wasn’t one of them. Some even heralded the end of inflation.

Today, inflation still isn’t a ‘problem’ in Asia. For the most part, it remains relatively modest, but it is on the rise in some countries in the region. And understanding what is driving that inflation matters. Policymakers need to consider the sources of inflation in making the right policy choices. What policy tools to choose. Continue reading

Sustaining Asia’s Recovery


By Anoop Singh

I am in Asia this week to launch our October 2010 Regional Economic Outlook: Asia and Pacific (REO) in Jakarta and Singapore. As I have inevitably found during visits to Asia over so many years, the mood here is confident about future economic prospects. Yet it is also watchful for risks that may be lurking over the horizon. This mood matches closely the main messages of our current assessment of the outlook for the region. Continue reading

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