IMF to up growth targets for Asian emerging markets

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By Koh Byung-joon
SEOUL, June 24 (Yonhap) -- The International Monetary Fund will likely upgrade
its growth outlook for South Korea and other Asian emerging economies as exports
and financial markets begin to stabilize following a global crisis, a senior
economist at the organization said Wednesday.

"We haven't finalized the new numbers (for emerging markets). But it is very
likely that many of the numbers are going to be revised upward on average by
about one percentage point," Olivier Blanchard, senior economic counselor at the
IMF, told an international conference here co-hosted by the Seoul government and
the World Bank.
The economies due for an upgrade include South Korea, Thailand and Indonesia,
Blanchard said, adding that the outlooks for China and India will likely be
maintained.
In its April prediction, the IMF expected South Korea's economy to decline 4
percent this year before rebounding 1.5 percent in 2010. The latest outlook will
come out within a month, he said, stopping short of giving a detailed timetable.
The optimistic view contrasts with the World Bank's projection unveiled on
Monday, in which it downgraded its growth outlook for South Korea to a 2.9
percent contraction, saying global markets will remain in a slump and affect the
nation's export-driven economy.
Blanchard said that the gloomy forecast in April was due to a decrease in exports
in South Korea, but that there are many signs that things are stabilizing.
"We are going to revise our forecast for Korea up. Where does it (the upgrade)
come from? It comes from the fact that exports have picked up a little bit, and
it comes from the fact that a number of measures which have been taken in Korea
are paying off... It is also due to the fact that depreciation of its currency
helped a little bit," he added.
But he cautioned against premature optimism, saying that a full-swing recovery
for South Korea and other Asian countries will hinge on a rebound in its large
export markets, including the United Sates and Europe.
As for oil markets, the IMF economist attributed the recent rise in crude prices
to speculation, which "can affect prices but not for very long." He expected oil
prices will not exceed US$70 per barrel and said the gains will not
significantly undermine the pace of economic recovery.
kokobj@yna.co.kr
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