India And China To Contribute More Than 50% Of Global Growth: IMF
The IMF has stated that India & China will contribute more than half of global growth this year. India is successively aheading despite the global economic slowdown.
According to a recent blog post from the International Monetary Fund (IMF), India and China are anticipated to provide more than fifty percent of the world’s growth this year, with the rest of Asia making up the remaining quarter.
After ending its zero-COVID policy and reopening in the second half of 2022, China recorded a faster-than-expected resurgence in economic activity, according to the IMF.
The Washington, DC-based lender also noted that due to border reopenings, improved supply chains, and the booming service industry, Cambodia, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam are returning to their robust pre-pandemic growth.
The IMF additionally noted that when food and oil prices fell, the economic situation in Asia and the Pacific began to improve.
According to the international lender, “These improvements are improving prospects across the area, with growth forecast to increase to 4.7% this year from 3.8% in 2022.
As a result, it will be the most dynamic of the world’s major geographic areas and a glimmer of hope in the dimming global economy.
Due to the ensuing increase in commodity prices and inflation worries, the Russian incursion of Ukraine and the global increase in policy rates by central banks were identified as the only obstacles to economic activity.
The IMF sounded a cautious note while still being bullish about China’s contribution to global growth. The international lender warned that the revitalized Chinese economy may push up the cost of goods and services globally.
“The restored dynamism of the Chinese economy may exert higher pressure on international commodity and service prices, especially in countries anticipating rebounding tourism,” the IMF said.
It also noted that numerous Asian nations now experience debt problems as a result of increased spending during the pandemic, which increased fiscal deficits.
According to the IMF, authorities must keep with their plans for gradual fiscal restructuring because several Asian nations are in a debt crisis. Also, doing so will prevent monetary and fiscal policies from working in opposition to one another.
According to the IMF, Asian nations also have to deal with high levels of borrowing in the domestic and corporate sectors as well as large bank exposure to the real estate market.