Asian policymakers must push ahead with structural changes to ensure the region continues to lead global growth and withstand volatility as the United States reduces monetary stimulus, the International Monetary Fund said, naming Japan and China as potential sources of risk.
Asian economies will face higher interest rates and bouts of volatility in capital flows and asset prices as global liquidity tightens amid a recovery in advanced nations, the Washington-based lender said in its Regional Economic Outlook for Asia and Pacific, released today.
Tightening of global liquidity is one of the four main risks confronting Asia this year and next year, the IMF said. Other dangers include a sharper-than-envisaged slowdown in China, waning effectiveness of growth-supporting policies in Japan, and political and geopolitical tensions that disrupt trade, it said.