Asia's Growth to Pick up Gradually in 2013: IMF

Asia's growth is set to pick up gradually during 2013 on strengthening external demand and continued robust domestic demand, according to the International Monetary Fund's World Economic Outlook.

 

For Asia as a whole, growth will pick up modestly to about 5.75 percent in 2013, largely as a result of recovering external demand and continued solid domestic demand.

 

Private demand will be supported by accommodative monetary and, in some cases, fiscal policies; easy financial conditions; and resilient labor markets.

 

Growth in the ASEAN-5 economies will remain strong at 6 percent in 2013, reflecting resilient domestic demand.

 

A large pipeline of projects under the Economic Transformation Plan will propel strong investment in Malaysia; robust remittance flows and low interest rates should continue to support private consumption and investment in the Philippines; and Indonesia will benefit from a recovery of commodity demand in China.

 

In Thailand, growth is expected to return to a more normal pace after a V-shaped recovery driven by public reconstruction and other flood-related investment in
2012.

 

Over in China, growth is set to accelerate slightly to about 8 percent in 2013, reflecting continued robust domestic demand in both consumption and investment and renewed external demand.

 

Growth will rise in India to 5.75 percent in 2013 as a result of improved external demand and recently implemented progrowth measures.

 

In Japan, growth is projected to be 1.5 percent in 2013, moderately higher than in the October 2012 WEO as a result of new fiscal and monetary stimulus, despite a sharp contraction in the second.

 

In Korea, improved exports should help spur private investment and help growth rebound to 2.75 percent.

 

Even as global tail risks recede, however, the risks and challenges emanating from within the region come more clearly into focus, including gradually increasing
financial imbalances in some economies and the potential that any loss of confidence in regional economic policies could disrupt trade and investment. Policymakers must balance support for sustainable and more inclusive growth with the need to contain financial stability risks with adequate supervision.

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