Asia can't carry world economy alone: Swan

13 Oct 2012, 3:07 pm   -   Source: AAP
Treasurer Wayne Swan has told the IMFC in Tokyo Asia can't carry the global economy alone. (AAP)

Treasurer Wayne Swan has told the IMFC in Tokyo Asia can't carry the global economy alone. (AAP)

Treasurer Wayne Swan says Asia can't carry the global economy alone and it's time the US and Europe started pulling their weight again on global economic growth

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Treasurer Wayne Swan says Asia alone can't carry the global economy and it's time the other big players started to pull their weight again on global economic growth.

In hard-hitting remarks to the International Monetary and Financial Committee (IMFC) meeting in Tokyo, Mr Swan said the US must take action to avoid falling off the fiscal cliff.

That would plunge the US into recession, dragging the rest of the world down with it.

The European Union has promised a banking union, the first real step in putting the Euro zone back on a path of long term stability, but he said the global economy was suffering with two of its growth engines misfiring at the same time.

Mr Swan said recession in Europe and tepid growth in the US were dragging down global growth and growth in the Asian region.

The IMF forecasts Asia to grow at 5.4 per cent in 2012 and 5.9 per cent in 2013, the lowest growth rate since the financial crisis, downgraded by 0.6 and 0.7 since the IMF's April update.

"In the past couple of years our region has charged along, in many ways masking the effects of stagnant growth in both the US and Europe, but this can't go on forever," he said.

"Asia alone can't carry the global economy. The message from the IMF is clear. The problems in the advanced economies are catching up with our region."

Mr Swan said India, Vietnam and Indonesia, as well as China, would play an important part in the ongoing economic rise of Asia.

"But it is time for the other players to get off the benches and start to pull their weight on global economic growth again," he said.

Mr Swan said in the past there had been many calls to action and much had been achieved but too many opportunities had been squandered.

"The opportunities are still there but we need to be willing to take them," he said.

Mr Swan said Australia faced the global headwinds from a position of almost unmatched strength but could not expect to be immune from problems beyond our shores.

"These global headwinds mean we'll have to find some substantial savings to return the budget to surplus in 2012-13, but we remain determined to do so and to continue our responsible economic management," he said.

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