This will make it by far the most dynamic of the world’s major regions and a bright spot in a slowing global economy, Krishna Srinivasan, Thomas Helbling and Shanaka J Peiris wrote in the blog.
With the economic headwinds that faced Asia and the Pacific last year starting to fade, global financial conditions easing, oil prices reducing and China’s economy rebounding, prospects across the region are improving, with growth set to accelerate to 4.7 per cent this year from 3.8 per cent in 2022, according to a blog on the IMF website.
The region’s emerging and developing economies, poised to expand by 5.3 per cent this year, drive this dynamism.
China and India alone are expected to contribute more than half of global growth this year, with the rest of Asia contributing an additional quarter.
Cambodia, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam are all back to their robust pre-pandemic growth, the blog noted.
The near-term outlook for Japan is stronger, supported by accommodative policies, border reopening and supply chain improvements while growth would fall back in 2024 as conditions normalise and policy support eases.
The strong performance of manufacturing exports has also started to cool under the weight of slowing global trading partners.
Asia’s inflation—which rose worryingly above central bank targets last year—is poised to moderate, the blog said.
While inflation is moving in the right direction, central banks need to stay alert as core inflation is still running above target, it cautions.
Many Asian countries face elevated financial vulnerabilities, with high leverage across household and corporate sectors, and significant bank exposure to real estate downturns, it added.
Fibre2Fashion News Desk (DS)