From the Editor: Asia picking up the pace

ASIA is leading the way out of global recession, in a move that seems to mark a break from the past. China and India are ahead of the pack, but they are not the only two strong performers, and Asia’s economic importance is unmistakable and palpable. In our lead article in this issue of Finance & Development, Anoop Singh, Director of the IMF’s Asia and Pacific Department, says that, based on expected trends, within five years Asia’s economy will be about 50 percent larger than it is today (in purchasing-power-parity terms), account for more than a third of global output, and be comparable in size to the economies of the United States and Europe. By 2030, Asian gross domestic product will exceed that of the Group of Seven industrialized countries.

Asia’s recovery is a shift from the past in several respects. First, although Asia’s contribution to past global recoveries was lower than that of other regions, this time the region is leading the world recovery. Second, Asia’s earlier recoveries were generally export driven, but this time the Asia rebound has been reinforced by domestic demand, including not only public stimulus but also household consumption. Finally, in past recoveries capital was slow to return to Asia; this time net capital inflows to the region have surged, reflecting high levels of global liquidity as well as Asia’s improved resilience and economic...