The International Monetary Fund (IMF) has predicted that Asia and the Pacific
will be the most dynamic region in the world this year, with India and China
driving most of the growth. The IMF study, “Regional Economic Outlook- Asia
and Pacific, “published on Tuesday, estimates that the region will contribute
almost 70% of global growth.
The report highlights the buoyant outlook for China and India, which are
expected to contribute approximately half of global growth. The IMF added
that 2023 could be a difficult year for the world economy due to the
consequences of tighter monetary policy and Russia’s conflict in Ukraine.
In accordance with other areas, the analysis predicts that China’s recovery and
India’s growth will be the main drivers of Asia’s dynamism, with the remainder
of Asia’s growth likely to peak in 2023. The reopening of China’s economy
following prolonged COVID-related restrictions is giving the region’s growth a
new boost.
The IMF, however, warns that this dynamic outlook does not suggest that
regional authorities can afford to be lax. It urges strict monetary policy until
inflation consistently returns to the target range, with China and Japan being
exceptions where output is below potential and inflation expectations have
remained low.
The report also raises concerns about ongoing inflationary pressures and
recent financial sector issues in the US and Europe. It cites the example of
Silicon Valley Bank, on March 10, leading to the failure of a few small regional
US banks. This had an impact on the worldwide banking sector and raised
concerns about an economic chain reaction.