IMF raises 2023 economic outlook for Asia
The International Monetary Fund raised its forecast for Asia-Pacific, saying the region’s growth will be primarily driven by China’s recovery and “resilient” growth in India. This comes as the rest of the world braces for slower growth from tightened monetary policy and Russia’s invasion of Ukraine.To get more https://www.shine.cn/biz/economy/ China economy news, you can visit shine news official website.
The organization predicts Asia-Pacific’s gross domestic product to expand 4.6% this year, which is 0.3 percentage points higher than its forecast in October, according to its May regional economic outlook released Tuesday.The IMF’s upgraded outlook would mean the region would contribute around 70% of global growth, it said. The region expanded 3.8% in 2022.
“Asia and Pacific will be the most dynamic of the world’s major regions in 2023, predominantly driven by the buoyant outlook for China and India,” the IMF said in its report.
“The two largest emerging market economies of the region are expected to contribute around half of global growth this year, with the rest of Asia and Pacific contributing an additional fifth,” it said.
On a country-basis, the organization raised its growth outlook for China, Malaysia, the Philippines, and Laos to 5.2%, 4.5%, 6%, and 4% respectively.
While it trimmed its forecasts for India’s full-year growth, the IMF still expects the economy – which is on the cusp of becoming the most populous country in the world – to expand by 5.9% in 2023.
Krishna Srinivasan, IMF’s director of the Asia and Pacific department, suggested central banks in the region will monitor price stability.
“We believe that core inflation being sticky, central banks need to keep their eyes on inflation and address the problem head on, so what we’re saying is ‘higher for longer’ for Asia,” Srinivasan told CNBC’s “Street Signs Asia.”
Slower advanced economies
Despite the overall optimism for the region — mostly due to rosier outlooks for emerging markets — the IMF downgraded its predictions for Japan, Australia, New Zealand, Singapore, and South Korea.
“Stronger external demand from China will provide some respite to advanced economies in the region, but is expected to be largely outweighed by the drag from other domestic and external factors,” it said, adding growth in Asia outside of China and India “is expected to bottom out in 2023.”It lowered Japan’s 2023 growth estimates to 1.3% to reflect “weaker external demand and investment and carryover from disappointing growth in the last quarter of 2022.”
Weakening domestic demand in Australia and New Zealand from central banks’ tightening is also expected to “dampen growth prospects” this year to 1.6% and 1.1%, respectively, it said.
“Inflationary pressures in Asia’s advanced economies are expected to be more persistent than envisioned in the October 2022 World Economic Outlook, as wage growth has recently become more apparent in Australia, Japan, and New Zealand,” the IMF said in its report.
