Regional Economic Outlook: Asia and the Pacific, October 2022: Sailing into Headwinds

Regional Economic Outlook, October 28, 2022

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Regional Economic Outlook: Asia and the Pacific, October 2022: Sailing into Headwinds

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Bibliographic details

• Published: October 28, 2022
• Series: Regional Economic Outlook
• DOI: https://doi.org/10.5089/9798400220517.086

Growth outlook and key projections

• Growth rebounded by 6.5 percent in 2021.
• Growth is expected to moderate to 4.0 percent in 2022.
• Growth is projected to rise to 4.3 percent in 2023.
• The region is expected to expand at a rate well below the average rate of 5½ percent seen over the preceding two decades.
• As the effects of the pandemic wane, new headwinds include global financial tightening and an expected slowdown of external demand.

Inflation and monetary policy guidance

• Inflation has risen above most central bank targets and is expected to peak in late 2022.
• Policy support is being gradually withdrawn as inflation rises and idle capacity is utilized.
• Monetary policy should be ready to tighten faster if the rise in core inflation turns out to be more persistent.

Fiscal policy and public debt

• The region’s rising public debt levels call for continued fiscal consolidation.
• Interventions to mitigate global food and energy shocks should be:
  • well targeted,
  • temporary, and
  • budget neutral.

Structural reforms and pandemic scarring

• Structural reforms are needed to boost growth and mitigate scarring expected from the pandemic, including:
  • making up for lost schooling through investments in education and training;
  • promoting diversification;
  • addressing the debt overhang from the pandemic; and
  • harnessing digitalization.

Multilateralism and global risks

• Strong multilateralism—including through international organizations, the Group of Twenty and regional processes—will be needed to:
  • mitigate geo-economic fragmentation, and
  • deliver much needed progress on climate change commitments.
• Asia remains a relative bright spot in an increasingly lethargic global economy but faces significant external and domestic risks that could derail the projected path.

Regional Economic Outlook: Asia and the Pacific, October 2022: Sailing into Headwinds (IMF), October 28, 2022.

References

• https://www.imf.org/en/publications/reo
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