The International Monetary Fund (IMF) is bullish on the Asia-Pacific’s emerging markets judging by its latest regional outlook.
The IMF says this will be driven by China’s recovery, as well as what it called ‘resilient’ growth in India.
The Washington-based organisation predicts Asia-Pacific’s gross domestic product will expand 4.6% this year, up from 3.8% in 2022.
The IMF’s upgraded outlook means the region will contribute a mammoth 70% of global growth this year.
“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 the 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 added.
On an individual country level, the organisation gave good 2023 growth outlook numbers for China of 5.2%, Malaysia 4.5%, the Philippines 6% and Laos 4%.
And while it decreased its forecast for India, the IMF still expects the economy to expand by an impressive 5.9% in 2023.
Yet despite the overall optimism for the region – based on the sunnier outlooks for emerging markets – the picture is not bright for all countries in the region.
The IMF has 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.
A big point being that in Asia outside of China and India growth “is expected to bottom out in 2023”, noted the IMF.
The IMF also lowered Japan’s 2023 growth estimates to 1.3% to reflect what it said was “weaker external demand and investment”. “Inflationary pressures in Asia’s advanced economies are expected to be more persistent than envisioned in the [IMF] October 2022 World Economic Outlook, as wage growth has recently become more apparent in Australia, Japan and New Zealand,” the IMF said.
The IMF: Asia will contribute about 70% of global growth this year.
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