Recovering global economy will buoy Asian growth if risks are kept at bay
Changyong Rhee says Hong Kong can also capitalise on robust domestic demand to grow this year
Asia is well positioned to capitalise on the largely favourable global trends and enjoy steady growth this year and next.
Recent policy actions taken to address vulnerabilities have started to bear fruit. With vigilance and further reforms, the region should remain resilient to global risks and continue to drive the global recovery.
For Hong Kong, a stronger external environment as well as continued resilient domestic demand should help propel the economy this year. Growth is expected to rise to 3.7 per cent with low unemployment and stable inflation.
How do we arrive at these conclusions in the IMF's latest "Regional Economic Outlook"? First, increased global activity will help Asia's exports. The growth momentum has gathered steam in the United States and the euro area, thanks to a reduction in fiscal tightening, and still accommodative monetary conditions.
And while some large emerging market economies have slowed, overall growth in emerging markets has picked up. Stock markets across most of the globe have reflected those trends and many have reached all-time highs.
Second, the largest economies in the region are also doing relatively well, despite some challenges. In mainland China, the unveiling of the government's reform agenda has boosted sentiment, and growth should moderate only slightly to 7.5 per cent this year.