APAC Region Boost GDP Growth To 4.2% In 2023

Despite global economic headwinds from slowing economies in the United States and Europe, economic growth in the Asia-Pacific (APAC) region is expected to accelerate in 2023, according to S&P Global Market Intelligence.

The key driver of APAC regional growth will be the rebound in growth momentum in mainland China as a result of the relaxation of COVID-19 restrictions.

The relaxation of COVID-19 restrictions in mainland China is expected to boost GDP growth from 3% in 2022 to 5.3% in 2023.

Despite headwinds from moderating global growth momentum due to economic slowdowns in the United States and the European Union, this will be the primary driver of APAC's GDP growth rate rising from 3.2 percent in 2022 to 4.2 percent in 2023. (EU).

According to Rajiv Biswas of S&P Global Market Intelligence, the APAC macroeconomic outlook for 2023 is expected to remain resilient to the recent financial shockwaves caused by the US banking system, as long as US financial stability risks are contained by US financial regulatory authorities.

S&P Global's Caixin China headline purchasing managers' index (PMI) rose from 49.2 in January to 51.6 in February, indicating an improvement in overall business conditions across China's manufacturing sector.

Though modest, it was the first expansion in seven months, with the reading being the survey's second-highest since May 2021.

The recovery of the Chinese economy is expected to have a significant positive impact on the rest of the APAC region. Given their close economic and trade ties with mainland China's economy, the economies of Hong Kong and Taiwan have already shown early signs of a recovery in economic activity, according to the analysis.

Strong domestic demand in the ASEAN region has continued to support economic expansion in a number of large economies. In February, the headline S&P Global ASEAN Manufacturing PMI increased for the seventeenth consecutive month. Furthermore, the rate of growth in the sector has accelerated, with the index rising from 51 in January to 51.5.

In early 2023, the Indian economy continued to exhibit expansionary economic conditions. The S&P Global India manufacturing PMI was 55.3 in February, unchanged from 55.4 in January, indicating that the manufacturing sector is still expanding.

India's manufacturing output increased by 4.8% year on year in the first ten months of fiscal 2022-23.