Asia-Pacific growth to slow to 7.2pc in 2008: IMF

The International Monetary Fund said Asia-Pacific economic regional growth is expected to slow to 8.0 percent this year and to 7.2 percent in 2008 if China keeps a tight rein on monetary policy.
The moderation in growth is being driven by slipping external demand, particularly from the United States and Europe, according to the IMF's new Regional Economic Outlook report on the Asia-Pacific area.
"This forecast also assumes an effective policy tightening in China and some slowdown from that," David Burton, director of the IMF Asia and Pacific department, said at a news briefing here.
The outlook for growth in emerging Asia is increasingly uncertain due to the US subprime crisis that erupted in August, rattling financial markets worldwide.
"A further bout of global financial volatility could have significant spillovers on the region, including by potentially reversing capital inflows," Burton said.
Asked about China's currency, regarded by the IMF, the United States and most of the Western world as undervalued, Burton said: "China has made a start" in allowing it to appreciate.
After the Chinese government delinked the renminbi from the dollar in 2005, the Chinese yuan currency has fallen about 10 percent in real effective terms, and about 10 percent in nominal effective terms, he said.
"They should pay more attention" to a basket of currencies, he said, "not just the dollar rate."
The Chinese government's measures to cool the sizzling economy, including interest rate hikes, have been insufficient, according to recent data.
China's inflation rate hovered at near 10-year highs in September as the economy edged closer to overheating, a top planning official said Thursday, signaling that more cooling measures were on the way.
The consumer price index rose 6.2 percent in September and 4.1 percent for the first nine months of the year, National Development and Reform Commission vice chairman Zhu Zhixin told journalists.