Slumping Asian growth; North Korea to test-fire longest-range missile; Iran launches home-developed satellite; Zimbabwe cholera crisis worsens; Spanish unemployment up; and more
Top of the Agenda: Slumping Asian Growth
The International Monetary Fund today announced new forecasts nearly halving economic growth prospects for the Asian continent for 2009. Asian economies will likely grow by 2.7 percent this year (FT), said analysts from the fund, as compared to the 4.9 percent growth IMF experts had forecast as recently as November. Dominique Strauss-Kahn, the IMF's managing director, added that Asian growth could fall below the current forecast, noting "a lot of downside risk." Strauss-Kahn said that Asian nations won't be able to pull out of the slump alone and are increasingly reliant (Bloomberg) on a global economic recovery to bolster their export prospects.
Meanwhile, the Wall Street Journal reports several Asian countries announced sharp slowdowns in inflation in January, potentially setting the stage for a new round of government intervention aimed at mitigating the risk of deflation. Reuters reports South Korea, Thailand, and Indonesia are all considering new interest rate cuts.
China today announced $19 billion (Xinhua) in new economic stimulus spending. The new spending, like a larger stimulus outlay already announced, is expected to focus on infrastructure investment.
Background:
In an expert brief published late last year, CFR's Elizabeth Economy and Adam Segal explain some of the challenges facing China's economy and how Beijing has responded.
PACIFIC RIM: North Korea Missiles
Yonhap reports North Korea may be preparing to test-fire its longest-range missile, a Taepodong-2 missile capable of carrying a nuclear warhead. Officials in Seoul say the launch could come within the next month or two.
CFR.org's Crisis Guide on the Korean Peninsula offers an in-depth look at the North Korean nuclear arsenal and its military capabilities.
CHINA-S.KOREA: The Chosun Ilbo reports disputes between Washington and Beijing over Chinese currency holdings could indirectly hurt South Korea and other countries if China decides to sell U.S. treasury bonds as a retaliatory measure.
ELSEWHERE:
Iran launches first home-developed satellite.
Zimbabwe cholera crisis worsens; more than 60,000 infected.
Spanish unemployment surges in January.
This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.