(Reuters) – Policymakers in Asia and Africa voiced growing economic optimism at a Reuters conference on Wednesday, chiming with a rally in emerging markets, an expected slowdown in U.S. rate hikes and an easing of COVID restrictions in China.
Finance ministers from India and crisis-stricken Sri Lanka and Zambia all gave upbeat outlooks on the Reuters NEXT event, on a day when emerging market shares were set to notch up their best month since May 2009.
South Korea’s central bank governor also struck an optimistic note in an interview aired on the conference, a mixture of virtual sessions and an in-person event in Recent York.
Governor Rhee Chang-yong revealed that the bank expected its policy rate to peak at around 3.5% in the present business cycle, a brief hop from the present level of three.25%.
He also said a reopening of China could propel the South Korean economy in 2023. China continues to be combating COVID restrictions and anti-lockdown protests three years after the pandemic began, nevertheless it is showing signs of relaxing the foundations.
“Actually if China loosens zero-COVID policy and reopens their borders and economy that will probably be an amazing stimulus for us. I hope that it may occur soon,” Rhee added.
That remark lined up with global miner BHP Group Chief Executive Mike Henry, who told the conference that China looked set for continued economic growth over the following 20 years.
Indian Finance Minister Nirmala Sitharaman forecast a “superb” economy ahead of 2024 national elections, fuelled by capital spending. Growth is officially seen at around 6.8%-7% for the yr to March 31, consistent with pre-pandemic rates.
Sri Lanka and Zambia, each grappling with debt crises fuelled partly by large Chinese loans, also took heart from the improving global mood music on rates of interest and inflation.
Sri Lanka, which collapsed this yr into its worst financial turmoil since independence from Britain in 1948, goals to revive growth to pre-crisis levels in 2026.
State finance minister Shehan Semasinghe also said the nation was intent on meeting a December deadline to present plans to assist unlock an International Monetary Fund bail-out.
Zambia, which defaulted on its sovereign debt in 2020, goals to finish its restructuring of nearly $15 billion of external debt in the primary quarter of 2023, Finance Minister Situmbeko Musokotwane said. Zambia is “in lively engagement” with its largest bilateral creditor China, he added.
The prospects of slowing rate rises and inflation in the USA could have revived some spirits in emerging markets, but they’ve yet to brighten the mood in Europe and the UK.
Tightening financial conditions and the prospect of an economic recession are going to be a toxic brew for European shares going into 2023, in response to a Reuters poll of fund managers and strategists.
To view the Reuters NEXT conference continue to exist Nov. 30 and Dec. 1, please click here
(Writing by Mark Bendeich; Editing by Lisa Shumaker)
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