Page last updated at 08:09 GMT, Wednesday, 21 October 2009 09:09 UK

IMF tells Asia to keep spending

China manufacturing
China spent 4tn yuan ($580bn, 352.7bn) to boost its economy

The International Monetary Fund has warned Asian nations not to withdraw their stimulus spending too soon.

With Japan out of recession and China seeing signs of a recovery, some observers have suggested that spending can be cut back.

"However, these plans should proceed cautiously until the recovery seems assured," deputy IMF managing director John Lipsky said.

Mr Lipsky said "the principal near-term risk" was the recovery stalling.

"This could occur if private demand does not pick up and replace the policy stimulus and inventory re-stocking that have recently been the key drivers of growth," he added.

Indian growth

Separately, the Indian government said its economy would grow 6.5% over the year to 31 March.

"On the whole, we must say that the Indian economy has weathered the international economic crisis very well," said C Rangarajan, chairman of the prime minister's Economic Advisory Council.

The outlook is higher than the central bank's prediction of 6% in July.

Last fiscal year, India's growth dropped sharply to 6.7%, after averaging 8.8% over the previous five years.

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