The International Monetary Fund has said in a report that the economic growth in the Asia-Pacific region is projected to increase to 4.6% this year from 3.8% recorded in 2022. Photo Credit: Reuters
Growth in the dynamic Asia-Pacific region is forecast to pick up from 3.8% recorded in 2022 to 4.6% this year, according to the International Monetary Fund, which said growth would be largely led by India and China.
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In its “Regional Economic Outlook – Asia and Pacific” report released on May 2, the Washington-based fund said the region would contribute about 70% of global growth. “Asia and the Pacific will be the most dynamic of the world’s major regions in 2023, driven mainly by the bullish outlook for China and India,” the IMF report said. half of global growth this year, with Asia and the Pacific contributing an additional fifth of the rest.
“Asia’s dynamism will be mainly driven by recovery in China and resilient growth in India, while growth in the rest of Asia is expected to be down in line with other regions in 2023,” it said.
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Meanwhile, the IMF said 2023 looks to be a challenging year for the global economyWith a decline in global growth as an effect of monetary policy tightening (through frequent interest rate hikes) and Russia’s war in Ukraine continues to weigh on economic activity.
In addition, persistent inflationary pressures and recent Financial Sector Problems in America and Europe, injecting additional uncertainty into an “already complex economic landscape”, it said.
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The collapse of some regional banks in the US, starting with Silicon Valley Bank, has sent ripples across the global banking industry and raised fears of the contagion’s impact on economies.
Growth in the Asia Pacific region is also getting a fresh impetus as China reopens its economy after extended COVID-19 related restrictions. However, the IMF cautioned that this dynamic outlook does not mean the region’s policy makers can become complacent.
“Monetary policy should remain tight till inflation is back within the target. The exceptions are China and Japan, where production is below capacity and inflation expectations remain muted.