Asia, excluding the Chinese mainland, was experiencing larger-than-expected impacts from the global financial turmoil via trade links, and was likely to see economic recovery by mid-2010, said an IMF official on Friday.
"We expect that the recovery will come for Asia, excluding China, by the middle of next year," Joshua Felman, assistant director of Asia and Pacific Department of the International Monetary Fund (IMF), said in an interview with Xinhua in Hong Kong.
Felman, who made a presentation on IMF's latest regional economic outlook report for Asia and the Pacific, said the economic situation in Asia, generally speaking, had stabilized, and things would gradually improve, although recovery would take much longer.
"China will start to rebound much more quickly. In fact, it maybe rebounding even now, because the government is spending so much money to help lift the economy," he said.
But Vivek Arora, senior resident representative of IMF in China, was quick to sound a cautious note, saying that it was still too early to make a definite judgment that the China was already on the way to a full recovery, although there had been signs that the worst might have been over.
In fact, the IMF report cautioned against over optimism and even adjusted its forecasts for the regional economy downward significantly.
The impacts from export slowdown on the Asian economies had been larger than expected, it said.
Emerging Asia, including China's Hong Kong and Taiwan, as well as South Korea, Singapore, Thailand, among others, suffered a decrease of no less than 15 percent in the fourth quarter of 2008 on a seasonally adjusted annualized basis, said the IMF report.
Moreover, the impacts were likely to carry into the next couple of years, dimming the medium economic outlook to some extent, the report argued.
Stephen Roach, chairman of Morgan Stanley Asia, said he agreed with the views of IMF, adding the situation at present for China was largely different from the export slowdowns followed by quick rebounds in 1997-1998 and 2001-2002.
The drive from export growth was likely to remain weak over the medium term and it remains to see whether domestic demand growth was sustainable, he added.
Other economists, however, disagreed with the pessimism.
Sharp export slowdowns were more likely to be followed by quick rebounds, and the short-term outlook was not that negative, said Michael Spencer, managing director, chief economist and head of global markets research Asia Pacific, Deutsche Bank.
Arora said China was now on the right way in policy directions although challenges remained as to whether the surges in domestic demands would be sustainable.
Spencer, however, said he believed China would be able to get domestic demand to work as an economic engine, although it might take a long period of time.
Spencer also cautioned against oversupply of bank lendings, which he said was likely to do more harm than good if the trend of rapid growth continues into next year.
The IMF, however, maintained it was key to keep the credit financing system at work, as the credit condition in general remained fragile.