Asia-Pacific To Contribute 70% Of Global Growth

A report from the International Monetary Fund (IMF) speculates that growth in the Asia-Pacific (APAC) region will increase to 4.6% this year from 3.8% in 2022, with India and China leading the way.

It stated in its recently released 'Regional Economic Outlook—Asia and Pacific' that the region would contribute roughly 70% of global growth.

"Asia and the Pacific will be the most dynamic of the world's major regions in 2023, driven primarily by the buoyant outlook for China and India," according to the report.

According to the forecast, India and China will contribute roughly half of global growth this year, with the rest of APAC contributing an additional fifth."Asia's dynamism will be driven primarily by the recovery in China and resilient growth in India, while growth in the rest of Asia is expected to bottom out in 2023, in line with other regions," it noted.

This year appears to be challenging for the global economy, with global growth slowing as the effects of tightening monetary policy (consistent interest rate hikes) and Russia's war in Ukraine continue to weigh on economic activity, according to the IMF.

Persistent inflationary pressures and recent financial sector problems in the United States and Europe are also adding uncertainty to a "already complex economic landscape," according to the report.

APAC growth is also being boosted by China's reopening of its economy following extended COVID-related restrictions. However, the IMF cautioned that this dynamic outlook does not imply that policymakers in the region can afford to be complacent.

"Monetary policy should remain tight until inflation returns to target over time." China and Japan are the exceptions, with output falling short of potential and inflation expectations remaining subdued," it added.