The International Monetary Fund (IMF) projected on Thursday that China will grow by 8.5 percent this year and 9.0 percent in 2010, saying China will lead Asia out of the economic recession.
Recent indicators point to a strengthening recovery in Asia "led by a rapid rebound in China, where growth accelerated to an annual rate of 7.1 percent in the first half of the year," IMF said in its World Economic Outlook (WEO) issued in Istanbul on Oct.1.
Asia's growth momentum will build during the second half of 2009, forming the basis for a generally moderate recovery in 2010,said the report.
China and India will lead the expansion this year and will grow at 8.5 percent and 5.4 percent respectively, boosted by large policy stimulus which is increasing demand from domestic sources, it said.
"The policy stimulus in China could support recoveries in other parts of Asia," the report said.
According to the report, China will see growth rise to 9.0 percent in 2010, while "emerging" Asia will grow by 5.0 percent this year and 6.8 percent in 2010.
While the manufacturing-oriented economies such as South Korea and Singapore slumped and had recorded peak declines in industrial production of about 25 percent by the end of 2008, only China, Indonesia and India escaped a severe recession, said the report.
The intensifying rebound in Asia can be linked to three factors, said the report, namely expansionary fiscal and monetary policy, are bound in financial markets and capital inflows and the growth impulse for industry following large inventory adjustments.
IMF on Thursday raised its 2010 growth forecast for the world economy to 3.1 percent from 2.5 percent, saying the global recession "is ending."
The WEO presents the IMF's analysis and projections of economic developments at the global level, in major country groups which are classified by region and stage of development, and in many individual countries. It focuses on major economic policy issues as well as on the analysis of economic developments and prospects.