Category Archives: General

The $364 Billion Real Estate Threat Inside China’s Biggest Banks

Bloomberg, May 8, 2015

china_bubble

The possible bust after a big boom.

Fitch Ratings has called real estate the “biggest threat” to Chinese banks as surging loans tied to properties coincide with defaults and falling sales.

Corporate loans backed by buildings have grown almost fivefold since 2008 and residential mortgages have more than tripled in the period among lenders rated by Fitch, the company said Friday. That’s seen property loans held by China’s four biggest lenders soar to a total 2.26 trillion yuan ($364 billion), according to their annual reports.

“Collateral is supposed to reduce bank risk — but the rise of property collateral in corporate loans may actually increase the chance of bank failure,” Fitch analysts Jack Yuan and Grace Wu said in the report. “This is because the widespread use of such collateral has lowered the perceived risks of lending, fueling China’s credit build-up and spreading real-estate risk to other sectors of the economy.”

Alarm bells sounded last month when Kaisa Group Holdings Ltd. became the first Chinese developer to default on offshore bonds, putting more scrutiny on a sector that made up a third of the nation’s economy in 2013, according to Gavekal Dragonomics. Property prices in 70 Chinese cities have fallen for more than a year, the worst losing streak in at least a decade, while sales have dropped for 11 of the past 24 months, Bloomberg-compiled data show.

Even Higher

Loans backed by properties now comprise 40 percent of all facilities held by Fitch-rated banks, according to the report. Total credit to real estate could be as high as 60 percent if other types of financing besides direct loans are included, Fitch said.

“The property market is usually one of the main revenue contributors to the state,” said Raymond Chia, the head of credit research for Asia ex-Japan at Schroder Investment Management Ltd. “With the weakness in the sector, especially with excess inventory overhang as well as weak earnings by developers, economic growth will be affected.”

Industrial & Commercial Bank of China Ltd., the world’s biggest bank by assets, held 443.5 billion yuan of real estate loans, or 6.6 percent of all facilities, at the end of last year, according to its annual report. The portion for Bank of China Ltd., the nation’s second-largest, was 714.6 billion yuan of advances, or 8.4 percent of its credit book.

China Construction Bank Corp.’s property loans were reported at 520.1 billion yuan, or 5.5 percent of overall facilities. Agricultural Bank of China Ltd.’s real estate loans stood at 581.1 billion yuan, or 11.3 percent.

Be Cheerful

There’s still reasons for optimism on Chinese property, helped by the central bank cutting the lenders’ reserve requirement ratio twice this year, said Owen Gallimore, a Singapore-based credit strategist at Australia & New Zealand Banking Group Ltd.

“The recent data on property sales has shown improvement, especially for the biggest developers,” he said in an interview. “And with the PBOC aggressively easing, it’s hard to be bearish on Chinese property.”

Banks and developers will be hoping the bulls are correct. Chinese loans secured by real estate have increased 400 percent since 2008 at lenders rated by Fitch, compared with a 260 percent rise in facilities overall, according to Fitch.

“We believe a significant portion of China’s 4 trillion yuan stimulus package found its way into the real estate sector,” the analysts said in Friday’s report. “The rise of property collateral is a familiar theme in real estate booms.”

Source

John Rubino: Mediocre Is The New Perfect

By John Rubino, May 8, 2015

Three things happened this morning: The Labor Department reported a big jump employment; the financial markets responded like kids on Christmas morning; and — with a few hours lag — level-headed analysts deconstructed the jobs report and found it to be mediocre at best.

To take just a few of the high (or low) points:

• Americans are still leaving the labor force
• Most of the new jobs created are part-time
• The vast majority of those are in services, which is to say waiters and bartenders and such
• Most new hires are over 55

For readers who want the whole depressing story, consider the following from Mish’s Global Economic Trend Analysis and Zero Hedge, which can generally be relied upon for this kind of quick-turnaround debunking of government pronouncements:

Employment Report Much Worse Than It Looks

Americans Not In The Labor Force Rise to Record 93,194,000

In April There Were 26 Waiters And Bartenders For Every Manufacturing Job Added

Payrolls Pump Deja Vu All Over Again

Old Workers Hit New All-Time High As All April Jobs Go To The “55 And Older”

Money managers can of course do this analysis and reach the same conclusion, which is that the US labor market remains a mess, with a predominance of old and/or low-paid service drones where well-paid factory workers and bankers used to be. So why did the financial markets pop on this news?

Because mediocre is the now the new perfect. The best-case environment for stocks and bonds is an economy that is growing just enough to stave off a collapse in corporate profits but not fast enough to goad the Fed into tightening. This report fit the bill. The bad statistics cited above are all the ammunition monetary doves need to justify taking the dreaded interest rate increase off the table in June and maybe even September. So low interest rates, rising corporate buybacks and pension funds with nowhere to go but equities and junk bonds are here for as far as the eye can see.

This article is written by John Rubino of Dollarcollapse.com and with his kind permission, Gecko Research has been privileged to publish his work on our website. To find out more about Dollarcollapse.com, please visit:

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NEWS: Silver Wheaton Reports Record Production of Over Ten Million Silver Equivalent Ounces in the First Quarter of 2015

May 7, 2015

Silver Wheaton Corp. (“Silver Wheaton” or the “Company”) (TSX:SLW) (NYSE:SLW) is pleased to announce its unaudited results for the first quarter ended March 31, 2015. All figures are presented in United States dollars unless otherwise noted.

FIRST QUARTER HIGHLIGHTS

  • Record attributable silver equivalent production in Q1 2015 of 10.4 million ounces (6.3 million ounces of silver and 55,100 ounces of gold), compared with 9.0 million ounces in Q1 2014, representing an increase of 15%.
  • Attributable silver equivalent sales volume in Q1 2015 of 7.7 million ounces (5.7 million ounces of silver and 28,400 ounces of gold), compared with 8.1 million ounces in Q1 2014, representing a decrease of 5%.
  • During the three month period ending March 31, 2015, payable silver equivalent ounces attributable to the Company produced but not yet delivered increased by 1.6 million ounces to approximately 6.5 million ounces.
  • Revenues of $130.5 million in Q1 2015 compared with $165.4 million in Q1 2014, representing a decrease of 21%.
  • Average realized sale price per silver equivalent ounce sold in Q1 2015 of $16.90 ($16.95 per ounce of silver and $1,214 per ounce of gold), compared with $20.38 in Q1 2014, representing a decrease of 17%.
  • Net earnings of $49.4 million ($0.13 per share) in Q1 2015 compared with $79.8 million ($0.22 per share) in Q1 2014, representing a decrease of 38%.
  • Operating cash flows of $89.1 million ($0.24 per share1) in Q1 2015 compared with $114.8 million ($0.32 per share1) in Q1 2014, representing a decrease of 22%.
  • Cash operating margin1 in Q1 2015 of $12.44 per silver equivalent ounce compared with $15.81 in Q1 2014, representing a decrease of 21%.
  • Average cash costs1 in Q1 2015 were $4.14 and $388 per ounce of silver and gold, respectively. On a silver equivalent basis, average cash costs1 decreased to $4.46 compared with $4.57 in Q1 2014.
  • Declared quarterly dividend of $0.05 per common share.
  • On January 5, 2015, the Company announced that it had amended its silver purchase agreement related to Barrick Gold Corporation’s ( “Barrick”) Pascua-Lama project (“Pascua-Lama”), located on the border of Chile and Argentina.
  • On February 27, 2015, the Company announced that it had amended and restated its revolving credit facility (“Revolving Facility”). Silver Wheaton increased the available credit from $1 billion to $2 billion and used proceeds drawn from the Revolving Facility together with cash on hand to repay the $1 billion of debt previously outstanding under the Company’s non-revolving term loan.
  • On March 2, 2015, Silver Wheaton announced that it had acquired from Vale S.A. (“Vale”) an additional 25% of the life of mine gold production from its Salobo mine, located in Brazil, for an upfront payment of $900 million.
  • On March 2, 2015, the Company announced that it had entered into an agreement with a syndicate of underwriters led by Scotiabank, pursuant to which they agreed to purchase, on a bought deal basis, 38,930,000 common shares of Silver Wheaton at a price of US$20.55 per share (the “Offering”), for aggregate gross proceeds to Silver Wheaton of approximately US$800 million.
  • On March 17, 2015, the Company announced that it had closed the Offering and received $800 million in gross proceeds (net proceeds of approximately $769 million after payment of underwriters’ fees and expenses).
  • Events Subsequent to the Quarter
    • Hudbay Minerals Inc.’s (“Hudbay”) Constancia mine in Peru achieved commercial production on April 30, 2015.

 

_____________________________
1 Please refer to non-IFRS measures at the end of this press release.

“Silver Wheaton had a strong start to 2015, with record production in the first quarter and the addition of more gold from one of our cornerstone assets. For the first time in our history, Silver Wheaton produced over ten million silver equivalent ounces in one quarter. While the quarterly sales volumes did not reflect the record production, we recognize that this is simply a timing issue and we fully expect to see increased sales as the year progresses,” said Randy Smallwood , President and Chief Executive Officer of Silver Wheaton. “Our record first quarter production was driven by the recent acquisition of an additional 25% of gold from the Salobo mine in Brazil, as well as the first contributions of gold and silver from the Constancia mine in Peru. We expect both of these streams to realize further gains over the coming year, as the Salobo mine is currently ramping-up production after expanding in the middle of last year and the Constancia mine achieved commercial production on April 30th of this year. We also continue to see some very good opportunities to add additional accretive ounces to our existing portfolio. Overall, the first quarter represents a strong start to what we believe will be a prolonged period of significant organic growth for Silver Wheaton without requiring any further capital.”

Financial Review

 

Revenues

Revenue was $130.5 million in the first quarter of 2015, on silver equivalent sales of 7.7 million ounces (5.7 million ounces of silver and 28,400 ounces of gold). This represents a 21% decrease from the $165.4 million of revenue generated in the first quarter of 2014 due primarily to a 17% decrease in the average realized silver equivalent price ($16.90 in Q1 2015 compared with $20.38 in Q1 2014), coupled with a 5% decrease in the number of silver equivalent ounces sold.

Costs and Expenses

Average cash costs1 in the first quarter of 2015 were $4.46 per silver equivalent ounce as compared with $4.57 during the comparable period of 2014. This resulted in a cash operating margin1 of $12.44 per silver equivalent ounce, a reduction of 21% as compared with Q1 2014. The decrease in the cash operating margin was primarily due to a 17% decrease in the average silver equivalent price realized in Q1 2015 compared with Q1 2014.

Earnings and Operating Cash Flows

Net earnings and cash flow from operations in the first quarter of 2015 were $49.4 million ($0.13 per share) and $89.1 million ($0.24 per share1), compared with $79.8 million ($0.22 per share) and $114.8 million ($0.32 per share1) for the same period in 2014, a decrease of 38% and 22%, respectively. Earnings and cash flow continued to be impacted by lower gold and silver prices.

_____________________________
1 Please refer to non-IFRS measures at the end of this press release.

Balance Sheet

At March 31, 2015, the Company had approximately $88.0 million of cash on hand and $800 million outstanding under the Company’s $2 billion revolving term loan.

As per the Company’s February 27, 2015, news release, Silver Wheaton amended its Revolving Facility by increasing the available credit from $1 billion to $2 billion and extending the term by two years, with the facility now maturing on February 27, 2020. As part of the amendment, the financial covenants were revised. The interest rate applicable to any drawings under the amended Revolving Facility remains unchanged. The Company used proceeds drawn from this amended Revolving Facility together with cash on hand to repay the $1 billion of debt previously outstanding under its non-revolving term loan and terminated that loan.

On March 2, 2015, the Company announced that it had entered into an agreement with a syndicate of underwriters led by Scotiabank, pursuant to which they had agreed to purchase, on a bought deal basis, 38,930,000 common shares of Silver Wheaton at a price of $20.55 per share (the “Offering”), for aggregate gross proceeds to Silver Wheaton of approximately $800 million. On March 17, 2015, the Company announced that it had closed the Offering and received $800 million in gross proceeds (net proceeds of approximately $769 million after payment of underwriters’ fees and expenses). The net proceeds were used to help fund the Company’s acquisition of an additional 25% gold stream from the Salobo mine.

First Quarter Asset Highlights

During the first quarter of 2015, attributable silver equivalent production was 10.4 million ounces (6.3 million ounces of silver and 55,100 ounces of gold), representing an increase of 15% compared with the first quarter of 2014.

Operational highlights for the quarter ended March 31, 2015, are as follows:

Salobo

In the first quarter of 2015, Salobo produced 27,185 ounces of gold attributable to Silver Wheaton, an increase of approximately 205% relative to the first quarter of 2014 primarily due to the doubling of the percentage of gold Silver Wheaton is entitled to as detailed below and the increased throughput as a result of the expansion to 24 million tons per annum (“Mtpa”) which commenced production mid-year 2014.

On March 2, 2015, the Company amended the agreement with Vale to acquire an additional amount of gold equal to 25% of the life of mine gold production from any minerals from the Salobo mine that enter the Salobo mineral processing facility from and after January 1, 2015. This acquisition is in addition to the 25% of the Salobo mine gold production that the Company acquired pursuant to the agreement in 2013. Silver Wheaton is now entitled to a total of 50% of the life of mine gold production from the Salobo mine.

Under the amended agreement, the Company paid Vale upfront cash consideration of $900 million and will pay ongoing payments of the lesser of $400 per ounce of gold (subject to an inflationary adjustment of 1% commencing as of January 1, 2017) for the full 50% of gold production or the prevailing market price per ounce of gold delivered. The additional 25% life of mine production that was processed from and after January 1, 2015, accrued retroactively to the Company. If throughput capacity is expanded above the current 24 Mpta within a predetermined period, the Company will be required to make an additional payment to Vale, relative to the 50% stream, based on a set fee schedule.

Constancia

As disclosed in Hudbay’s first quarter of 2015 MD&A, the Constancia mine achieved commercial production on April 30, 2015. Hudbay reported that ocean shipments began in April 2015 and that the mine and concentrator are currently operating at or above design capacity. According to Hudbay, the plant is performing as designed and throughput has occasionally exceeded design due to favourable ore characteristics, with peaks of over 90,000 tonnes per day. Hudbay has indicated that as at April 30, 2015, 42,575 tonnes of copper concentrate had been produced, of which approximately 20,500 tonnes had been shipped. Hudbay continues to expect the operation to achieve steady state design and feasibility level recoveries of copper in the fourth quarter of 2015.

San Dimas

On August 6, 2010, Goldcorp Inc. (“Goldcorp”) completed the sale of the San Dimas mine to Primero Mining Corp (“Primero”). In conjunction with the sale, Silver Wheaton amended its silver purchase agreement relating to the mine. The term of the agreement, as it relates to San Dimas, was extended to the life of mine. During the first four years following the closing of the transaction, Primero delivered to Silver Wheaton a per annum amount equal to the first 3.5 million ounces of payable silver produced at San Dimas and 50% of any excess, and Silver Wheaton received an additional 1.5 million ounces of silver per annum that was delivered by Goldcorp. According to the amended agreement, beginning on August 6, 2014, the fourth anniversary of the closing, Primero delivers a per annum amount to Silver Wheaton equal to the first 6 million ounces of payable silver produced at San Dimas and 50% of any excess, and Goldcorp’s obligation to deliver supplemental silver ceased.

In the first quarter of 2015, San Dimas produced 1.9 million ounces of silver, an increase of approximately 20% relative to the first quarter of 2014. This was primarily due to increased production as a result of the expansion to 2,500 tonnes per day (“tpd”) which was completed early in 2014 and to the sharing threshold increasing to 6 million ounces1. In addition, during the quarter, the San Dimas mill consistently operated above its nameplate capacity of 2,500 tpd with an average throughput of 2,863 tpd, a 30% increase versus Q1 2014. Importantly, the San Dimas mine maintained pace with the mill, achieving record quarterly production of 2,931 tpd, 21% higher than in Q1 20142.  Metallurgical recoveries also reverted to their historical high levels with the completion of a final leach tank, averaging 93% for silver in the quarter.

______________________________
1 In the prior year, the San Dimas mine reached the previous sharing threshold of 3.5 million ounces of silver on March 13, 2014.
2 Primero’s first quarter of 2015 MD&A dated May 6, 2015.

Peñasquito

In the first quarter of 2015, the Peñasquito mine produced 1.4 million ounces of silver attributable to Silver Wheaton, a decrease of approximately 29% relative to the fourth quarter of 2014 due to lower grades being mined and lower metallurgical recoveries. Goldcorp has indicated that it anticipates grades to improve throughout 2015.

As disclosed in Goldcorp’s first quarter of 2015 MD&A, in the first quarter of 2015, Peñasquito commenced a feasibility study on the Metallurgical Enhancement Project (“MEP”) which is the combined study to assess the feasibility of the Concentrate Enrichment Project (“CEP”) and Pyrite Leach Peñasquito sulphide plant (“Pyrite Leach”). The study will assess the potential for producing saleable copper concentrate (CEP) and the viability of leaching a pyrite concentrate from the zinc flotation tailings (Pyrite Leach). Successful implementation of one or both of these new process improvements has the potential to improve the overall economics and life of mine of Peñasquito. The feasibility study is expected to be complete in early 2016.

Barrick / Pascua-Lama

In the first quarter of 2015, attributable silver production from Barrick was 0.6 million ounces, an increase of approximately 112% relative to the first quarter of 2014 primarily due to higher grades at the Veladero and Lagunas Norte mines.

On January 5, 2015, the Company announced that it had amended its silver purchase agreement related to Barrick’s Pascua-Lama project. The amendment entails Silver Wheaton being entitled to 100% of the silver production from Barrick’s Lagunas Norte, Pierina and Veladero mines until March 31, 2018, an extension of 1 ¼ years, and extending the completion test deadline an additional 2 ½ years to June 30, 2020.  As a reminder, if the requirements of the completion test have not been satisfied by the amended completion date, the agreement may be terminated by Silver Wheaton. In such an event, Silver Wheaton will be entitled to the return of the upfront cash consideration of $625 million less a credit for any silver delivered up to that date.

Sudbury

In the first quarter of 2015, Sudbury produced 10,112 ounces of gold, an increase of approximately 57% relative to the first quarter of 2014 primarily due to the commencement of operations at the Totten mine as well as higher gold grades being mined.

Other: Toroparu

On April 22, 2015, the Company amended its early deposit precious metal purchase agreement with Sandspring Resources Ltd. (“Sandspring”) to include the acquisition of an amount equal to 50% of the silver production from its Toroparu project (“Toroparu”) located in the Republic of Guyana, South America. Silver Wheaton will pay Sandspring incremental upfront cash payments totaling $5.0 million for 50% of the payable silver production from Toroparu. In addition, Silver Wheaton will make ongoing payments to Sandspring of the lesser of the market price and $3.90 per payable ounce of silver delivered to Silver Wheaton over the life of Toroparu, subject to a 1% annual increase starting on the fourth anniversary of production. Sandspring is entitled to receive US$2.0 million of the incremental US$5.0 million cash payment in four equal installments over the course of 2015, subject to the satisfaction of certain conditions.

Produced But Not Yet Delivered 1

During the first quarter of 2015, payable silver equivalent ounces produced but not yet delivered to Silver Wheaton by its partners increased by 1.6 million ounces to approximately 6.5 million silver equivalent payable ounces at March 31, 2015, primarily related to an increase related to the Salobo gold purchase agreement. Payable ounces produced but not yet delivered to Silver Wheaton are expected to average approximately 2 to 3 months of annualized production but may vary from quarter to quarter due to a number of mining operations factors including mine ramp-up, delays in shipments, etc.

____________________________
1 Payable silver equivalent ounces produced but not yet delivered are based on management estimates, and may be updated in future periods as additional information is received.

Detailed mine by mine production and sales figures can be found in the Appendix to this press release and in Silver Wheaton’s MD&A in the ‘Results of Operations and Operational Review’ section.

Webcast and Conference Call Details

A conference call will be held Friday, May 8, 2015, starting at 11:00 am (Eastern Time) to discuss these results. To participate in the live call, please use one of the following methods:

Dial toll free from Canada or the US:             

888-231-8191888-231-8191 FREE

Dial from outside Canada or the US:             

647-427-7450647-427-7450

Pass code:                                                     

25021471

Live audio webcast:                                       

www.silverwheaton.com

Participants should dial in five to ten minutes before the call.

The conference call will be recorded and available until May 15, 2015. The webcast will be available for one year. You can listen to an archive of the call by one of the following methods:

Dial toll free from Canada or the US:             

855-859-2056855-859-2056 FREE

Dial from outside Canada or the US:             

416-849-0833416-849-0833

Pass code:                                                     

25021471

Archived audio webcast:                                

www.silverwheaton.com 

This earnings release should be read in conjunction with Silver Wheaton’s MD&A and unaudited Financial Statements, which are available on the Company’s website at www.silverwheaton.com and have been posted on SEDAR at www.sedar.com.

Mr. Neil Burns , Vice President, Technical Services for Silver Wheaton, is a “qualified person” as such term is defined under National Instrument 43-101, and has reviewed and approved the information on mineral reserves and mineral resources disclosed in this news release.

Full release

NEWS: Silver Wheaton Declares Second Quarterly Dividend Payment for 2015

May 7, 2015

Silver Wheaton Corp. (“Silver Wheaton” or the “Company”) (TSX:SLW) (NYSE:SLW) is pleased to announce that its Board of Directors has declared its second quarterly cash dividend payment for 2015 of US$0.05 per common share.

Second Quarterly Dividend

The second quarterly cash dividend of US$0.05 will be paid to holders of record of Silver Wheaton common shares as of the close of business on May 20, 2015, and will be distributed on or about June 2, 2015.

Under the Company’s dividend policy, the quarterly dividend per common share will be equal to 20% of the average cash generated by operating activities in the previous four quarters divided by the Company’s then outstanding common shares, all rounded to the nearest cent.

The declaration, timing, amount and payment of future dividends remain at the discretion of the Board of Directors. This dividend qualifies as an ‘eligible dividend’ for Canadian income tax purposes.

Dividend Reinvestment Plan

The Company has previously implemented a Dividend Reinvestment Plan (“DRIP”). Participation in the DRIP is optional. For the purposes of this second quarterly dividend, the Company has elected to issue common shares under the DRIP through treasury at a 3% discount to the Average Market Price, as defined in the DRIP. However, the Company may, from time to time, in its discretion, change or eliminate the discount applicable to Treasury Acquisitions, as defined in the DRIP, or direct that such common shares be purchased in Market Acquisitions, as defined in the DRIP, at the prevailing market price, any of which would be publicly announced.

The DRIP and enrollment forms are available for download on the Company’s website at www.silverwheaton.com, accessible by quick links directly from the home page, and can also be found in the ‘investors’ section, under the ‘dividends’ tab.

Registered shareholders may also enroll in the DRIP online through the plan agent’s self-service web portal at: https://www.canstockta.com/en/InvestorServices/Investor_Information/Issuer_List/IssuerDetail.jsp?companyCode=1501.

Beneficial shareholders should contact their financial intermediary to arrange enrollment. All shareholders considering enrollment in the DRIP should carefully review the terms of the DRIP and consult with their advisors as to the implications of enrollment in the DRIP.

This press release is not an offer to sell or a solicitation of an offer of securities. A registration statement relating to the DRIP has been filed with the U.S. Securities and Exchange Commission and may be obtained under the Company’s profile on the U.S. Securities and Exchange Commission’s website at http://www.sec.gov. A written copy of the prospectus included in the registration statement may be obtained by contacting the Corporate Secretary of the Company at 666 Burrard Street, Suite 3150, Park Place, Vancouver,

Full release

IMF says Asia to lead growth in 2015 despite China slowdown

AP, May 7, 2015

IMF says Asia to lead growth in 2015 despite China slowdown

 

IMF says Asia to lead growth in 2015, helped by lower oil prices, despite slowdown in China

Asian economies will lead world growth in 2015, expanding at a 5.6 percent pace that is level with last year, as recoveries in India and Japan help to offset the slowdown in China, the IMF said in a report Thursday.

IMF economists expressed concern, however, over the potential for weaker growth if policy makers in the region fail to follow through with needed changes, saying it was a time not for “alarm but it is a time for alert.”

The IMF’s regional economic outlook forecasts that growth in the Asia-Pacific area will moderate to 5.5 percent in 2016.

Asian growth fell to 5.5 percent in 2014 from 5.9 percent in 2013, and is bound to shift lower as China’s economy, the world’s second largest, settles at a more sustainable level than the torrid double-digit pace of the past decade.

China’s report of 7 percent growth in the first quarter of the year was in keeping with that trend.

“You cannot expect that a country can keep 10 percent growth forever,” said Changyong Rhee, director of the IMF’s Asia and Pacific Department. “The current phase of growth is in line with our forecasts, but even if it’s a desirable slowdown it can have a negative impact on other countries.”

Rising levels of debt and potential financial market disruptions are other risks to growth, though moves by Chinese financial regulators to rein in margin trading and umbrella trusts are a positive step, he said in a news conference that was broadcast online.

On a broader scale, the IMF report said its estimates show lower oil prices could help boost global growth by 0.3 percentage points to 0.7 percentage points in 2015. Major producers of oil and other commodities are suffering from lower exports, but for countries such as Japan, China and Thailand the lower costs are a boon both for businesses and consumers.

Growth varies widely across the region, from 8.3 percent forecast for 2015 in Myanmar, 7.5 percent for India and 6.8 percent for China to 1 percent for Japan.

Japan, the world’s No. 3 economy, shows signs of recovering from a recession last year following an increase in the country’s sales tax to 8 percent from 5 percent.

The IMF’s report said that Japan’s growth will remain modest but could improve with more aggressive measures to improve productivity through improved labor laws and corporate governance.

Despite its slowdown, China remains a main driver of global GDP expansion, accounting for a larger share of world economic growth than the rest of Asia combined, the IMF said.

Reforms intended to make the state-dominated economy more productive, with stronger domestic consumption and services, and less dependence on trade and investment are crucial for future growth, Rhee said.

Full implementation of reforms would boost overall income by 5 percent by 2020 over the economy’s performance without such reforms, he said.

Source