APAC to Pack a Punch: IMF report

According to the International Monetary Fund , the Asia Pacific region is all set to contribute over 70 percent towards global growth this year, notwithstanding the gloom spread by soaring #inflation, mounting #debt, and rampant financial vulnerabilities. The forecast for the #GDP growth for 2023 is 4.6 percent, as against 3.8 percent the last year. For India, IMF has predicted a slowing momentum following a softening of demand as against a strong external services demand, resulting in a moderation in growth rate from 6.8 percent in 2022 to 5.9 percent this year. For FY24, the growth prediction for India is 6.1 percent while for FY25, it has been revised to?6.3 percent.

IMF believes, even with the growth rate cut, India will be the fastest-growing economy over the next two years. It also foresees great dynamism among Asian emerging markets and developing economies in the year 2023. The prime drivers of this dynamism, it believes, would be China’s recovery and India’s resilience accounting for about 50 percent of the global growth. The lender expects growth in most other economies to bottom out. It has also cautioned governments of the inadequacy of squeezed budgets towards stabilizing debt, and soaring interest rates would make the challenge even more formidable.

• Hence, it has highlighted the need to prevent financial stress through better vigilance and proactive contingency plans
• It has urged the central bankers of the world to extend lending and discount facilities to help ease liquidity woes of the banking sector while tightening policies countering inflationary pressures
• Monetary policy goals and financial stability goals should be kept separate as far as possible unless of course global financial stress and instability grow to alarming proportions

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