Taiwan and Thailand exited
recession last quarter and Malaysia probably followed, as Asian economies lead
the global recovery.
Asian economies are paving the way
for a global recovery from the worst worldwide recession since the Great
Depression after central banks in the region slashed interest rates to record
lows and governments increased spending by more than $1 trillion.
The strength of Asia’s rebound has
seen policy makers lead the way in withdrawing stimulus.
“Asia’s recovery is at least two
quarters ahead of the U.S. and monetary authorities have been contemplating
exit strategies for some time,” said David Carbon, head of economic and
currency research at DBS Group Holdings Ltd. in Singapore.
“With higher U.S. rates on the
cards, Asia’s central banks can pursue their exit strategies with less to fear
on the inflow and currency front.”
Policy makers in China, India and
Vietnam are tightening monetary conditions amid signs that accelerating growth
is fuelling inflation and may led to asset bubbles.
The U.S. Federal Reserve, which
increased its discount rate by a quarter point to 0.75 per cent on 18 February,
has left its benchmark policy rate unchanged for more than a year.
The emergence of the world economy
from the global recession is encouraging companies in Asia to boost production
and hire more workers.
Singapore last week raised its
economic growth forecast for 2010, predicting an expansion of as much as 6.5
per cent this year.
Taiwan’s fourth-quarter economic
growth was the strongest since June 2004 and Thailand’s increase in GDP was the
most in seven quarters.