Asia could enjoy a rapid economic recovery next year once its major trading partners pull out of recession, IMF managing director Dominique Strauss-Kahn said. The Asian economies cannot begin to recover while the rest of the global economy is in a slump because they rely heavily on exports, the head of the International Monetary Fund said.

But once the US and European economies start to rebound, some Asian economies “may recover very fast,” he said, speaking at an online briefing from Washington.

“A rapid recovery is possible,” Strauss-Kahn said. “Some Asian economies are very good candidates to be the leading economies when things get going.” Some Asian countries, including China, have more room for fiscal measures to stimulate their economies, he said.

The IMF expects Asia GDP to grow an average of 2.7% this year, down from a November forecast of 4.9%, while Asia’s economies are likely to grow at an average rate of more than 5% in 2010 with growth in some countries set to pick up quickly once the environment improves, he said.

IMF’s chief also said that China’s economy, second largest in Asia after Japan, might achieve the 8% growth rate this year but it was challenging. “The growth in China is tremendously important for the world economy.” Strauss-Kahn responded to a question raised by Xinhua. “We expect 6.7% growth this year (for China), 8% will be very challenging but is possible.”

“China has showed in the past that it sometimes were able to do much more than expected.”

The IMF’s growth forecast for South Korea has been sharply downgraded to a contraction of 4% from 2% growth this year but said the export-dependent economy, Asia’s fourth-largest, would return to growth of 4.2% in 2010 as the global economy recovers.

Source – AFP, Xinhua