India and China are expected to contribute more than half of the global growth this year, International Monetary Fund (IMF) said on Monday. It added that rest of Asian countries will contribute an additional 25 per cent.
Asia-Pacific (APAC) region is projected to be a bright spot in the global economy this year with the region’s economy set to grow 4.7 per cent in 2023 as against 3.8 per cent last year, IMF stated. “Cambodia, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam are all back to their robust pre-pandemic growth,” it was written in an IMF blog post. The “faster than expected rebound” of economic activity in China was attributed to the rolling back of its zero Covid policy and re-opening of the country.
The IMF also expects the Chinese economic recovery to have a positive impact on rest of the Asian economies as well. According to an analysis done by IMF, every percentage point of higher growth in China leads to 0.3 per cent output rise in the rest of Asia.
In its economic forecast for 2024, the global financial agency projected 6.8 per cent real GDP growth for India which is the joint second-highest along with Vietnam among all Asian emerging economies. Mongolia tops the list in this category with an estimated growth of 7 per cent in 2024.
Despite the bright short-term outlook, IMF cautioned that some important longer-term challenges are yet to be resolved. “With several Asian countries facing debt distress, authorities must continue with their plans for gradual fiscal consolidation. Doing so will also ensure that monetary and fiscal policies are not acting at cross purposes,” it said.
