Asia to see 4.6% growth in 2023

According to the latest regional economic outlook report released by the International Monetary Fund (IMF) on Tuesday, the economy of the Asia-Pacific region is expected to grow by 4.6% this year, compared to a 3.8% increase last year. The report also indicated that the region will contribute around 70% of global growth this year, with China’s reopening providing a boost.

Despite the somber backdrop of what looks like a challenging year for the global economy, Asia and the Pacific remains a dynamic region, according to the report’s overview. The IMF highlighted the economic recovery in China and India’s economic growth as the main drivers of the region’s economic vitality. Other emerging economies in the area are also growing steadily, although some slightly less than last year.

The IMF warned of risks from persistent inflation, stating that inflation has eased but remains above targets in most countries. It also said that the spillover effect of the banking crisis in Europe and the United States has been limited so far, but the fragility of the global financial environment remains high. The report urged central banks in Asia, excluding Japan and China, to keep monetary policy tight to keep inflation in check, which could remain stubbornly high due to robust domestic demand.

The IMF’s report added that global growth is expected to decelerate as rising interest rates and geopolitical conflicts impact economic activity. Banking strains in the US and Europe have also added greater uncertainty to the economic landscape. Nonetheless, the Asia-Pacific region remains a bright spot in terms of economic growth, with China’s reopening providing fresh momentum.

Overall, the IMF’s report signals that the Asia-Pacific region’s economy is in a good position to drive global growth this year. However, persistent inflation and banking strains in other parts of the world remain potential risks that could impact the region’s economic vitality in the future.