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The International Monetary Fund (IMF) in its “Regional Economic Outlook for Asia and Pacific” report on Thursday, projected that half of the world’s growth in 2023 and 2024 will be driven by India and China. The Asia Pacific region is expected to maintain its dynamism, with regional growth set to increase from 3.9% in 2022 to 4.6% in 2023 before slowing down to a two-decade low of 3.9% in the medium term, excluding the year 2020.
India’s growth estimate has been revised upwards to 6.3% in FY24, driven by resilient domestic demand and strong investment inflows. On the other hand, China’s economy is projected to grow by 5% in 2023 and 4.2% in 2024, representing a downward revision due to renewed weakness in the property sector, despite more policy support than previously assumed.
The IMF report also indicated that tight financial conditions are expected to limit demand in Asia’s advanced economies, while emerging markets will enjoy relatively accommodative conditions despite monetary policy tightening. The role of global commodity prices and worldwide monetary policy tightening by central banks is significant. For instance, India saw an inflation rise due to a weather-related vegetable price shock.
Furthermore, ASEAN economies are projected to grow by 4.2% in 2023 and 4.6% in 2024 according to the same report.
On the same day, Vietnam was forecasted to achieve a GDP growth rate of 4.7% in 2023 as per the IMF’s Regional Economic Outlook Update. This outlook comes with recovery signs evident in the last quarter, as reported by the Vietnam News Agency. Despite challenges in the export, real estate, and financial sectors, Vietnam is making progress towards its annual growth target, according to IMF’s Shanaka Peiris.
Other financial institutions also weighed in on Vietnam’s economic outlook. The World Bank concurred with this year’s forecast but predicted slower growth in the future. Meanwhile, the Asian Development Bank revised its April forecast of 6.5% down to 5.8%. United Overseas Bank (OTC:) maintained a 5.2% prediction for 2023 and projected six percent growth for 2024, as per BERNAMA-XINHUA.
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