Potential Growth in Emerging Asia

Author/Editor: Rahul Anand ; Kevin C. Cheng ; Sidra Rehman ; Longmei Zhang
Publication Date: January 13, 2014
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: Using three distinct approaches—statistical filtering, production function, and multivariate model— this paper estimates potential growth for China, India, and five ASEAN countries (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) during 1993–2013. The main findings include: (i) both China and India have recently exhibited a slowdown in potential growth, largely reflecting a decline of total factor productivity (TFP) growth; (ii) by contrast, trend growth for the five ASEAN countries has been rather stable and might even have increased marginally, with the notable exception of Vietnam;(iii) over the longer term, demographic factors will be much more supportive in India and some ASEAN economies than in China, where working-age population should start shrinking, with the overall dependency ratio climbing by the end of this decade. Improving or sustaining potential growth calls for broad structural reforms.
Series: Working Paper No. 14/2
Subject(s): Economic growth | China | India | Asia | Emerging markets | Productivity | Fiscal reforms

Publication Date: January 13, 2014
ISBN/ISSN: 9781484345726/1018-5941 Format: Paper
Stock No: WPIEA201402 Pages: 26
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