Asian economy faces only mild slowdown: IMF official

SEOUL : Asian economies have weathered the US subprime mortgage crisis well and will experience only a mild slowdown next year, a senior International Monetary Fund official said Thursday.
But any sharp US slowdown would have a significant effect on the region, especially if other industrial countries followed suit, said Jerald Schiff, the IMF's assistant director for the Asia-Pacific.
"Like the region as a whole, Korea weathered very well the crisis in the summer," Schiff said in a speech on the economic outlook for South Korea and the region. Schiff said the outlook for Asia remains positive next year, "although global developments have increased significantly the downside risks."
He said the IMF projects a mild slowdown in Asia in 2008 and a moderate slowdown globally but "there is a sizeable risk of a US recession and a sharper global slowdown." This would most likely be triggered by extended weakness in the US housing market, spreading to lower consumption and investment and higher unemployment.
The US housing market showed few signs so far of recovery.