The International Monetary Fund (IMF) anticipates a prosperous year for Asia in 2024, with the region maintaining momentum and contributing significantly to global growth, according to Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department. The IMF has upgraded the regional growth forecast for 2024 to 4.5%, up from the October projection of 4.2%.
Srinivasan highlighted the improved prospects for a soft landing in the region and shared the positive news of growth revisions for both 2023 and 2024. The IMF estimates a growth rate of 4.7% for 2023, up from the October projection of 4.6%. This positive trend is attributed to increased spending on disaster reconstruction and resilience projects in China, along with strong domestic demand in India.
The director justified the upward projections for 2024 by emphasizing the continuation of a positive dynamic from the previous year. A supportive external environment, particularly robust growth in the United States, is reinforcing domestic resilience. Additionally, increased demand for technology products, such as computers, electronics, and optical goods, is benefiting economies like Korea and Singapore. China and Thailand’s substantial policy stimulus announcements further contribute to the positive outlook.
Despite the overall regional optimism, Srinivasan acknowledged significant divergence between countries. In Japan, while growth is expected to remain above potential, it is projected to slow from approximately 2% in 2023 to around 1% in 2024 due to fading one-off factors, including a depreciated yen, strong tourism, and a recovery in business investment.
On the other hand, India’s growth is expected to remain robust at 6.5% in both 2024 and 2025. Looking ahead to 2025, the IMF projects a mild deceleration in regional growth to 4.3%, primarily reflecting China’s slowdown.
Srinivasan also noted mostly positive news on inflation, further enhancing the prospects for a soft landing in the region.
