IMF Projects Asia-Pacific Region To Grow 4.6% Led By India And China

International Monetary Fund (IMF) projects that the Asia-Pacific region growth would increase to 4.6 per cent from 3.8 per cent recorded in 2022 and will be largely led by India and China.

According to the Washington-based fund, in its Regional Economic Outlook - Asia Pacific report released on Tuesday said that the region would contribute nearly 70 per cent of global growth.

"Asia and Pacific will be the most dynamic of the world's major regions in 2023, predominantly driven by the buoyant outlook for China and India," the IMF report said. It also added that the both of the nations, being the largest emerging market economies of the region are expected to contribute around half of global growth this year, with the rest of Asia and Pacific contributing an additional fifth.

"Asia's dynamism will be driven primarily by the recovery in China and resilient growth in India, while growth in rest of Asia is expected to bottom out in 2023, in line with other regions", it said.

Meanwhile IMF further mentioned that 2023 would be a challenging year for the global economy. The global growth's deceleration as the effects of tightening stance of the monetary policy of global banks (through consistent interest rate hikes) and Russia's war in Ukraine continue to weigh on economic activity.

Also, persistent inflationary pressures and recent financial sector problems in the US and Europe, injecting additional uncertainty looms over into an "already complex economic landscape.

One of the most prominent lenders in the world of technology startups, Silicon Valley Bank, which was struggling, first first collapsed on March 10, after a run on the bank by the depositors. Its closure led to a contagion effect and the subsequent shutting down of other banks, including First bank on Monday.

The collapse of a few regional banks in the US, which started with Silicon Valley Bank, has sent ripples across the global banking industry and posed fears of a contagion effect across economies..

The growth in the Asia Pacific region is also getting a fresh impetus from China's reopeneing of its economy after extended Covid-related restrictions.

However, 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 falls durably back within the target. The exceptions are China and Japan, where output is below potential and inflation expectations have stayed muted, it added.