In a blog post, the IMF said the Asia-Pacific region’s economy will grow by 4.7 percent in 2023, up from 3.8 percent last year. Which makes it a bright spot in the current sluggish global economy.
The IMF expects India and China to contribute more than 50 percent to global growth. The rest of Asia is expected to contribute an additional quarter, the IMF said. The International Monetary Fund (IMF) also states that China has strong trade and tourism links. Now China’s reopening has paved the way for an expected rapid return to economic activity.
Discussing other Asian countries, the IMF says that “Cambodia, Indonesia, Malaysia, the Philippines, Thailand and Vietnam have returned to their strong pre-pandemic growth.” “For every percentage point of higher growth in China, output in the rest of Asia rose by about 0.3 percent,” the IMF cited in its analysis as saying. Inflation in Asia is set to remain moderate this year, the International Monetary Fund said.
“There are encouraging signs that headline inflation peaked in the second half of last year, although core inflation is proving more persistent and has yet to be definitively contained,” the IMF said in its blog post.
It also said “Amid easing fiscal and commodity headwinds, we expect inflation to return to the central bank’s target sometime next year.” But the IMF cautioned that central banks need to be cautious even though inflation is moving in the right direction but core inflation is still above target.
Inflation in India rose to a three-month high of 6.25 percent, mainly due to a rise in prices of goods and commodities. On February 8, the Reserve Bank of India (RBI) hiked its repo rate by 25 basis points to 6.25 percent. The IMF said central banks would need to raise interest rates further to control inflation.