IMF says Asia-Pacific to fuel more than half of global economic growth in 2023 on back of China’s reopening

The International Monetary Fund said a rebound in China’s economic activity will provide ‘fresh momentum’ for Asia’s growth, which is likely to increase to 4.6 per cent this year

It also urged Asian lenders to guard against depreciation pressures, particularly in the real estate sector, following recent banking failures in the US and Europe

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Singapore’s GDP growth for the first quarter contracted by 0.7 per cent. Photo: AFP

Published: 1:33pm, 14 Apr 2023

The International Monetary Fund has said Asia-Pacific would power more than half of the global growth this year despite slashing its outlook for the region’s advanced economies amid mounting risks.

GDP growth predictions for advanced economies, including Singapore, South Korea and Australia were reduced by 0.4 per cent compared with the IMF’s last forecast in October.

The multilateral lender noted the region’s overall GDP growth is expected to increase to 4.6 per cent, which will drive more than 70 per cent of global economic expansion in 2023. It also upgraded emerging Asia’s growth estimates by another 0.4 per cent.

“Global growth is expected to decelerate and bottom out in 2023 … but despite the sombre backdrop of a challenging year for the world economy, Asia and the Pacific remains a dynamic region,” Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, said during the institution’s spring meetings in Washington on Thursday.

“China’s reopened economy is rebounding strongly, and this will generate positive spillovers to its trading partners, providing fresh momentum for Asia’s growth.”

Of the advanced economies, projected GDP growth for Singapore and New Zealand in 2023 fell the most, by 0.8 per cent to 1.5 and 1.1 per cent, respectively.