The International Monetary Fund says many Asian economies are tocontinue to tumble this year and will take some time to recover fromthe global economic slow-down. The IMF says Asian governments shouldsustain economic stimulus policies and encourage more domesticconsumption.
The new IMF report on the economic outlook for theAsia and the Pacific says the region will take longer than other partsof the world to recover from the global slow-down.
The Washington-based organization says Japan is expected this year to experience its worst recession on record.
The economies of Korea, Hong Kong, Taiwan, New Zealand and Australia are also expected to shrink.
InSoutheast Asia, the International Monetary Fund says Singapore,Malaysia and Thailand will contract while the Philippines will recordzero growth.
"Accordingly, we forecast that Asia's growth willdecelerate to just 1.3 percent this year before rebounding to 4.2percent in 2010, still well below the region's potential and the 5.1percent rate recorded in 2008," said Kalpana Kochhar, deputy directorof the IMF's Asia and Pacific Department.
On the positive side, China, India, Indonesia and Vietnam are expected to slow down this year, but still grow their economies.
TheIMF says most Asian economies, with the exceptions of Singapore andTaiwan, are expected to grow next year as exports begin to revive.
But, Kochhar says that also depends on Asian governments continuing to stimulate their economies.
"Fiscalstimulus provided in 2009 will need to be sustained into next year. And, in many cases there is also scope for reducing interest ratesfurther or even adopting unconventional monetary policies as in theadvanced countries," said Kochhar.
Kochhar adds that Asiancountries also need to maintain their foreign exchange liquiditythrough currency swaps or assistance from organizations like theInternational Monetary Fund.
Most Asian economies worst hit by the global slow-down rely on manufacturing for export as a major growth engine.
But the lack of credit in developed countries has led to what the IMF calls a "collapse in the demand" for Asian exports.
TheIMF says between September 2008 and February this year, merchandiseexports in emerging Asian economies fell at an annualized rate of about70 percent - almost three times the drop experienced during the late1990s Asian financial crisis.
In the long run, the InternationalMonetary Fund says, Asian economies will need to change their structureto rely less on exports, since consumption in advanced countries mayremain weak for years to come.