Asia came out with growth – Newspaper Kommersant No. 67 (7512) dated 04/18/2023

The contribution of the Asia-Pacific region to global economic growth this year may be more than 70%, follows from the IMF forecasts. Analysts revised last year’s estimate of the region’s total GDP for 2023 and raised it by 0.3 percentage points to 4.6% (after 3.8% in 2022). The improvement in forecasts is largely due to the momentum that other countries are waiting for from the opening of the Chinese economy – although the Chinese economic recovery has not yet had a “significant impact” on the region: now it is associated more with “internal factors”, in particular, with increased demand for consumer goods, and not with investments, as before.

According to the IMF, the growth of the Chinese economy will accelerate to 5.2% this year, and slow down to 4.5% in 2024. Against the background of the ongoing recovery (see Kommersant on March 9), the expected inflation rates in 2023 and 2024 are 2% and 2.2%, respectively. The growth rates of some other developing countries this year may be lower than in 2022, but still sufficient to seriously affect the overall situation in the region, the fund believes (see chart). Thus, India’s GDP in 2023 is expected to be 5.9% (after 6.8% in 2022). Growth is also expected in some developed countries, for example, in Japan (for details, see Kommersant of April 6), it is assumed that GDP growth in 2023 will be 1.3% (after 1.1% in 2022). The cumulative growth of the largest economies in the Asia-Pacific region, experts predict, will slow down to 1.6%.

Among the main problems of the region, the IMF names inflation, the level of which is still above the target, and recommends countries to pursue a tighter monetary policy (in most Asian countries, it has been significantly softened over the past year). It is expected that against the background of the growth of public debt in the countries of the Asia-Pacific region, their fiscal policy will also become tougher. However, according to IMF estimates, the projected consolidation in this part may not be enough to stabilize the situation.

Analysts are also concerned about the slowdown in the economic growth of the countries of the region in the medium term: this trend is especially noticeable in the example of China – for the countries that are China’s trading partners, the effect of such a slowdown can be especially serious, the IMF believes.

Christina Borovikova