IMF official: Domestic demand beefs up growth in Asia

Domestic demand is ramping up in Asia, boosting growth in a historically export-led region, an International Monetary Fund (IMF) official said here on Friday."Domestic demand in Asia has been more of a key driver of Asian growth than we could have expected a couple of years ago," said Anoop Singh, director of the IMF's Asia and Pacific department, at a news conference about the Asia-Pacific economic outlook.The IMF has recommended in recent years that emerging Asian nations boost domestic demand from newly wealthy consumers, so as to shore up their economies against the Western economies in crisis."Consumption and private investment has been robust across Asia, " Singh noted.Particularly in countries of the Association of Southeast Asian Nations (ASEAN), which includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Myanmar, Cambodia, Laos and Vietnam, "you see that demand has picked up and there's more demand within ASEAN economies," he said."Demand is coming more in consumer products within ASEAN and less simply from the supply chain," he added.At the same time, Asia is "clearly continuing to lead the three- speed global recovery," Singh said, reiterating IMF reports earlier this week that split the world into three groups, with emerging economies faring well, countries including the United States on the mend, and the eurozone and Japan not yet out of the woods.After a year of subdued performance, growth in Asia is set to pick up gradually in 2013 to around 5.75 percent, up 0.5 percentage points from the previous year. In China, growth is on track with earlier predictions, at around 8 percent this year, and is projected to pick up to 8.25 percent next year. Japan's stimulus is expected to help sustain growth at 1.5 percent this year, the IMF said.It also expects some variation within the ASEAN countries, such as Cambodia and Myanmar, which are expected to grow at a rapid clip that exceeds 6.5 percent.Risks are "narrower" and "more balanced than they were 6 months ago," but they are still there, Singh said."Credit ratios and output levels are moving above trends in several Asian economies, fueled by easy global and domestic financial conditions," he explained. "While corporate and financial sector balance sheets in the region are generally sound, financial imbalances can worsen and are often difficult to unwind. "