(Aug 28): Asian governments are trickling out fiscal stimulus amid a deepening exports slump, bolstering central bank efforts to shore up their economies as the global mood darkens.
From South Korea to Thailand, authorities have this month either allocated or pledged extra spending and cut taxes to offset the damage the US-China trade war is inflicting on the world’s manufacturing region. With relatively low public debt compared to peers globally, governments in South Korea and Indonesia are targeting record spending next year, while in Hong Kong, a raft of stimulus measures have been announced to prevent the economy tipping into recession.
Yet the room to maneuver is mixed. While countries like China and Singapore have space to spend more, others, like Indonesia and India, are constrained by fiscal and current account deficits. In any case, rolling out effective fiscal policy isn’t easy given bureaucratic lags and the risk of choosing inefficient programs.
