Corporate woes rising as Asia reels from crisis: IMF
Thursday, 14 May 2009
WASHINGTON, May 13 (AFP): The global financial crisis is taking an increasing toll on Asia's corporate sector with the region's economies now among the world's hardest hit, a senior IMF official warned yesterday.
"Corporate risks are rising and market indicators are flashing warning signs," IMF deputy managing director Takatoshi Kato said.
"There are signs that even the best Asian corporate 'names' are being rationed out of financial markets and are considering approaching their government for direct assistance," he told the annual meeting of the Pacific Economic Cooperation Council, a regional think tank, in Washington.
Large Asian firms, like their US counterparts, entered the crisis with strong balance sheets and when the demand shock hit, they faced little immediate pressure to scale back their activities or cut costs, he said.
"However, liquidity positions have since dwindled." Kato said the global economic downturn is hitting Asia more severely than other regions with fourth quarter data showing a decline in output of nearly 15 per cent in Asia, excluding China and India.
Many small and medium-sized enterprises, he said, were also suffocating under the weight of the global crisis, which stemmed from a US home mortgage meltdown that triggered financial turmoil and slammed the brakes on growth.
"Corporate risks are rising and market indicators are flashing warning signs," IMF deputy managing director Takatoshi Kato said.
"There are signs that even the best Asian corporate 'names' are being rationed out of financial markets and are considering approaching their government for direct assistance," he told the annual meeting of the Pacific Economic Cooperation Council, a regional think tank, in Washington.
Large Asian firms, like their US counterparts, entered the crisis with strong balance sheets and when the demand shock hit, they faced little immediate pressure to scale back their activities or cut costs, he said.
"However, liquidity positions have since dwindled." Kato said the global economic downturn is hitting Asia more severely than other regions with fourth quarter data showing a decline in output of nearly 15 per cent in Asia, excluding China and India.
Many small and medium-sized enterprises, he said, were also suffocating under the weight of the global crisis, which stemmed from a US home mortgage meltdown that triggered financial turmoil and slammed the brakes on growth.