Asian governments are stepping up stimulus as economic growth stalls

SINGAPORE - Asian governments are starting to do their bit to revive economic growth as central banks gradually pull back on monetary policy easing.

That may be easier said than done. Unlike interest-rate decisions generally made by a small central bank committee, fiscal stimulus needs approval from governments and sometimes parliaments, and may run up against debt limits anchored in law. In addition, the impact of fiscal policy may appear only with a considerable lag - a disincentive for leaders who might be out of office by then.

A key meeting to set economic policy this month will detail the balance between monetary and fiscal settings for 2020. Meanwhile, officials are bringing forward from next year the use of some off-balance-sheet infrastructure spending financed by local government debt. SOUTH KOREA As economic growth slumps to a decade low, South Korea's government proposed a record 513.5 trillion won budget for next year, a 9.3 per cent increase from this year's main budget. Finance Minister Hong Nam-ki called the budget"as expansionary as possible." The Bank of Korea has already cut its benchmark rate to match a record low.

The government now expects to run a rare budget deficit this fiscal year. Still, given the city's structural problems and the sharpness of the downturn, economists and the International Monetary Fund say the response has been insufficient. INDONESIA A slump in revenue is pushing the budget deficit closer to the legal limit of 3 per cent of GDP. Rather than cut back on spending, the government has increased this year's deficit target to as much as 2.2 per cent of GDP and is ready to raise next year's projection as well, Deputy Finance Minister Suahasil Nazara said. President Joko Widodo also is pushing structural and tax reforms to attract investment.

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