IMF says it expects a severe recession in Asia!

TAIPEI, Taiwan - May 7, 2009 - The International Monetary Fund (IMF) yesterday sharply slashed its growth outlook for Asia, predicting a “long and severe recession” for the region’s wealthier but export-reliant economies.

The U.S.-based institution said it now expected growth in Asia would slow to 1.3 percent this year after a forecast late last year of 2.7 percent.

“The spillovers from the global crisis have impacted Asia with unexpected speed and force,” the IMF said in its regional economic outlook.

“Prospects for an imminent rebound of economic activity are weak,” it said, underlining that the region was heavily dependent on exports at a time when demand had weakened.

It said it expected 4.3 percent growth next year, down from a forecast of 4.5 percent.

For emerging countries in Asia, the IMF lowered its growth forecast to 3.3 percent from 4.4 percent. It put next year’s growth at 5.4 percent, down from an initial 6 percent.

The region’s wealthier economies “are expected to experience a long and severe recession” because of their heavy reliance on high-tech exports and extensive exposure to the global financial system, the IMF said.