{
  "title": "IMF Survey : Asia: Growth Remains Strong, Expected to Ease Only Modestly",
  "publication": "IMF News, May 3, 2016",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/socar050316b",
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  "summary": "Growth in Asia and the Pacific is expected to remain strong at 5.3 percent this year and next, accounting for almost two-thirds of global growth.",
  "publishDate": "2016-05-03",
  "sections": [
    {
      "heading": "Regional growth and outlook",
      "content": "- Growth in Asia and the Pacific is expected to remain strong at 5.3 percent this year and next, accounting for almost two-thirds of global growth.\n- Despite a slight moderation, Asia remains the engine of global growth, driven by resilient domestic demand amid weak external demand.\n- Domestic demand drivers cited: low unemployment, growth in disposable income, lower commodities prices, and macroeconomic stimulus."
    },
    {
      "heading": "Country-specific projections and dynamics",
      "content": "- China:\n  - Growth forecast to moderate from 6.9 percent in 2015 to 6.5 percent this year and 6.2 percent in 2017.\n  - Ongoing rebalancing from manufacturing and investment toward services and consumption.\n  - Medium-term consolidation in heavy industries (steel, shipbuilding) to reduce excess capacity; consumer expenditure becoming a more important growth engine.\n- Japan:\n  - Growth expected at 0.5 percent in 2016, then dropping to -0.1 percent in 2017 as the effect of the consumption tax increase takes hold (forecast does not account for likely growth-supporting policies to offset the increase).\n  - Aging population and high public debt are major long-term drags.\n- India:\n  - GDP expected to increase by 7.5 percent this year and next; remains the fastest-growing large economy in the world.\n- Other economies:\n  - Vietnam leading fast-growing economies in Southeast Asia, helped by rapidly growing exports of electronics and garment manufactures.\n  - Philippines and Malaysia expected to retain robust growth, underpinned by resilient domestic demand."
    },
    {
      "heading": "Downside risks and vulnerabilities",
      "content": "- External challenges:\n  - Slow growth in advanced economies.\n  - Broad slowdown across emerging markets.\n  - Weak global trade.\n  - Persistently low commodity prices.\n  - Increasingly volatile global financial markets.\n- Domestic vulnerabilities:\n  - High debt incurred in recent years in some countries.\n  - China’s transition may disrupt regional partners, especially those heavily exposed to China.\n  - Geopolitical tensions and domestic policy uncertainty risk trade disruptions or lower domestic demand.\n  - Natural disasters can reverse gains, particularly in lower-income countries and small states (including many Pacific islands).\n  - Reduced financial services by global banks (“de-risking”) may hold back financial inclusion and growth in small states.\n- Upside possibilities:\n  - Low commodity prices could boost regional economies more than expected.\n  - Regional and multilateral trade agreements, such as the Trans-Pacific Partnership, could benefit Asia-Pacific even before ratification."
    },
    {
      "heading": "Findings from background studies",
      "content": "- Commodity and China rebalancing impacts:\n  - China’s slowdown contributes to a large drop in prices of some metals.\n  - Rebalancing increases demand for some foodstuffs as Chinese consumers favor higher-quality and higher-protein items; Chinese tourism continues to grow.\n  - Countries with exposure to China’s consumers can benefit; those dependent on investment and manufacturing may face near-term losses. Over time, the region is likely to benefit as China’s growth model becomes more sustainable.\n- Inequality:\n  - Inequality has risen in many countries in Asia, with growth less beneficial to the poor compared with the past.\n  - Structural reforms plus fiscal policy can help reduce inequality and foster more inclusive growth.\n  - Key areas to address: broaden access to education, health, and financial services; tackle labor-market duality and informality.\n  - Reforms should avoid costly, across-the-board subsidy schemes and focus on expanding social spending through well-targeted interventions and more-progressive tax codes.\n  - Recent reforms cited positively include elimination of fuel-price controls in most major economies of the region."
    },
    {
      "heading": "Policy recommendations to boost resilience and growth",
      "content": "- Monetary policy:\n  - Since monetary settings are broadly appropriate and inflation remains low, there is room to cut policy rates if needed to boost demand.\n- Fiscal policy:\n  - Gradual consolidation is generally desirable to rebuild policy space.\n  - Adjust the composition of spending to allow for growth-friendly infrastructure and social spending in many economies.\n- Exchange rate and external-sector policies:\n  - Flexible exchange rates should remain the first line of defense against external shocks.\n  - Foreign-exchange intervention and capital-flow measures could be deployed in special circumstances, such as disorderly market conditions.\n- Financial stability:\n  - Continue use of macroprudential policies to deal with financial volatility and risks as a complement to monetary and fiscal policies.\n- Structural reforms:\n  - Needed to bolster potential growth and facilitate rebalancing.\n  - Past reforms have been effective in fostering diversification and facilitating Asia’s entry into global markets.\n\nSource: IMF Survey : Asia: Growth Remains Strong, Expected to Ease Only Modestly (May 3, 2016)\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- IMF Country Focus\n- In The News\n- Read the report\n- Advancing Asia: investing in the future\n- MD Lagarde: Asia’s advancing role\n- Asia and the IMF\n- World economic outlook\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/socar050316b"
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    "Published: May 3, 2016",
    "Growth in Asia and the Pacific is expected to remain strong at 5.3 percent this year and next, accounting for almost two-thirds of global growth.",
    "Despite a slight moderation, Asia remains the engine of global growth, driven by resilient domestic demand amid weak external demand.",
    "Domestic demand drivers cited: low unemployment, growth in disposable income, lower commodities prices, and macroeconomic stimulus.",
    "China:",
    "Japan:",
    "India:",
    "Other economies:",
    "External challenges:",
    "Domestic vulnerabilities:",
    "Upside possibilities:",
    "Commodity and China rebalancing impacts:",
    "Inequality:",
    "Monetary policy:",
    "Fiscal policy:",
    "Exchange rate and external-sector policies:",
    "Financial stability:",
    "Structural reforms:",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Country Focus](https://www.imf.org/en/news/country-focus)",
    "[In The News](https://www.imf.org/en/news/search)",
    "[Read the report](http://www.imf.org/external/pubs/ft/reo/2016/apd/eng/areo0516.htm)",
    "[Advancing Asia: investing in the future](http://www.imf.org/external/np/seminars/eng/2016/advancingasia/)",
    "[MD Lagarde: Asia’s advancing role](https://www.imf.org/external/np/speeches/2016/031216.htm)",
    "[Asia and the IMF](http://www.imf.org/external/region/apd/index.aspx)",
    "[World economic outlook](http://www.imf.org/external/pubs/ft/weo/2016/01/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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