Asia-Pacific to approach smooth economic transition – IMF
Asia-Pacific is approaching a smooth economic transition, marked by rapid disinflation and robust growth, though variations exist within the region, the latest IMF Regional Economic Outlook released on Tuesday showed.
لإhe report emphasises that tailored policies are necessary to address specific country circumstances.
Despite challenges like tight monetary policies and subdued external demand, the region exceeded expectations with a 5.0 per cent growth in 2023, driven by strong domestic demand in emerging markets. However, headline inflation has continued to decline, especially in emerging Asia, due to timely monetary tightening and other factors.
The report also forecasted that growth for 2024 is expected to slow to 4.5 per cent, with the region contributing significantly to global growth.
Inflation trajectories are projected to converge, and growth is expected to moderate further in 2025 due to the structural slowdown in China.
Moreover, near-term risks are balanced, with potential upsides from stronger growth in Europe and the US but downsides from geopolitical tensions.
According to the report, central banks need to ensure a smooth return of inflation to target, and policymakers should focus on domestic price stability while being cautious of external interest rate moves.
Furthermore, fiscal consolidation efforts are needed to address high debt levels and prepare for medium-term challenges like ageing populations and climate change. Supervisors should remain vigilant in monitoring risks as the effects of tight monetary policies continue to affect balance sheets.
