More structural reforms needed for economies to weather diverging monetary policies - APEC

Diverging monetary policies is a top concern of the financial ministers in the region as it caps the member economies' growth, Finance undersecretary Gil Beltran told reporters in a briefing after the first day of the Financial and Central Bank Deputies' Meeting in Tagaytay City on Thursday.

 

"The main issue that concerns them is how to make their economies grow as fast as before the global financial crisis," he said.

 

"Before the global financial crisis, countries were growing very fast... but after that, it slowed down. It's about to recover now," said Beltran, who chairs the meeting.

 

The International Monetary Fund (IMF) forecasts the global economy to expand by 3.5 percent this year and by 3.7 percent next year.

 

But despite some rebound in economic growth, Beltran said some countries have a low growth level, like Europe and Japan. "In Europe, Japan, they're loosening up [policy] because they want to revive growth."

 

This is the opposite of what's going to happen in the US, where it is expected to adjust key interest rates from zero to normal levels.

 

These contradicting monetary stances may result in some volatility in the financial markets and economies need to put up more structural reforms to weather this situation, Beltran said.

 

"The best antidote to volatility is structural reforms, adopting measures that will make your economy grow faster, enhancing efficiency in the markets and production processes, getting some sectors which are not able to get financing so that they will be able to finance their businesses," he said.

 

The Finance official also said the APEC finance ministers reforms will also restore investor confidence in the region.

 

"They noted there is a slowdown in investments which explains why there's need for some effort on the part of member economies to do some more structural reforms to improve on their policies so that their economies will strengthen, investor confidence will be restored," Beltran said. — ELR, GMA News