## Opening Remarks by IMF Asia and Pacific Department Director Krishna Srinivasan at the Regional Economic Outlook Press Conference, Marrakesh, Morocco, October 13, 2023 _IMF News, October 13, 2023_ ## Source details **Canonical URL:** [Opening Remarks by IMF Asia and Pacific Department Director Krishna Srinivasan at the Regional Economic Outlook Press Conference, Marrakesh, Morocco, October 13, 2023](https://www.imf.org/en/news/articles/2023/10/12/sp101323-apdpresser-ksopeningremarks) ## Other formats - [Markdown version](/en/news/articles/2023/10/12/sp101323-apdpresser-ksopeningremarks/index.md) - [Structured JSON version](/en/news/articles/2023/10/12/sp101323-apdpresser-ksopeningremarks/index.json) - [Bundle manifest](/en/news/articles/2023/10/12/sp101323-apdpresser-ksopeningremarks/bundle-manifest.json) ## Bibliographic details - Published: October 13, 2023 --- ### Global outlook - Global growth is forecast to slow from 3.5 percent in 2022 to 3 percent in 2023 and 2.9 percent in 2024. - Outlook supported by continued consumption dynamism in the US. - Downside pressures: China’s worsening property crisis, tight policy stances around the world, the consequences of Russia’s war in Ukraine, and growing geoeconomic fragmentation. ### Asia-Pacific regional summary and contribution to global growth - Asia-Pacific is expected to grow by 4.6 percent in 2023 and by 4.2 percent in 2024. - Region is on track to contribute about two-thirds of global growth. - Pacific Island Countries with high dependence on tourism: GDP is still more than 10 percent below pre-pandemic levels, with challenges from higher fiscal deficits, elevated debt, and shrinking fiscal space. ### Country and sub-region forecasts and developments - China: - Reopening boosted services and retail sales; benefit to manufacturing is short lived. - Real estate sector faces pressures on debt repayments, home sales, and investment. - Revised growth forecasts: 5 percent for 2023 and 4.2 percent for 2024. - Japan: - Economy projected to grow by 2 percent in 2023. - This is 0.7 percentage points higher than in the April forecast. - Drivers: strong domestic demand and accommodative monetary and fiscal policies. - India: - Growth remains robust, driven by large public capital expenditure push and resilient domestic demand. - Expected growth: 6.3 percent in 2023 and 6.3 percent in 2024. - Korea: - Downturn in technology exports projected to dampen near-term growth momentum. - Economy expected to rebound next year as the technology cycle turns the corner. - Australia: - Large public investment and robust external demand should lift growth. - Domestic demand weakening due to rising mortgage payments and lower real disposable incomes. - ASEAN economies: - Expected growth: 4.2 percent in 2023 and 4.6 percent in 2024. - Downward revision relative to April World Economic Outlook: 0.4 percentage points in 2023 and 0.3 percentage points in 2024. - Downgrade reflects weaker growth outturns and external demand, waning revenge consumption, and monetary policy tightening. ### High-frequency indicators, sectoral dynamics, and inflation - China: - Manufacturing PMI showed an expansion of activity in September. - Year-on-year growth of retail sales has improved. - Monthly data are volatile; caution warranted in interpreting short-term fluctuations. - Services sector in Asia: - Continued resilience and strength evident from PMIs. - Manufacturing sector in Asia: - Exhibits weakness across the region. - Persistent downturn of the technology cycle weighs on manufacturing in advanced economies. - In September, manufacturing activity in Asia’s emerging markets (excluding China) moved into negative territory. - Inflation: - Headline inflation has declined from post-pandemic peaks as global commodity prices receded and monetary policy took effect, albeit with signs of renewed price pressures more recently. - In a few advanced economies in Asia, core inflation remains sticky due to tight labor markets and positive output gaps. - Except for Japan, inflation is expected to return to within target ranges by the end of 2024. - Risks to persistent inflation: recent commodity price spikes, exchange rate changes yet to fully pass through, and tighter labor markets. ### Financial markets, vulnerabilities, and supervisory guidance - Financial conditions: - Advanced Asia: tightened as higher rates took hold. - Emerging Asia: saw accommodative financial conditions, though recent rise in US long-term yields following the September US FED meeting has exerted pressures. - Recent developments: - Financial tightening observed across Asian markets in the past few weeks. - Long-term local currency sovereign yields in some economies in the Asia and Pacific have increased substantially since the FOMC meeting in September. - Asian currencies have depreciated across the board, although to a limited extent compared to previous US dollar-strengthening episodes. - Recommendations for supervisors: - Remain vigilant on systemic risks and calibrate macro-prudential measures given higher leverage and rates. - If financial sector stress emerges, deploy liquidity and other support measures promptly while modernizing resolution frameworks. ### Policy messages and priorities for the Asia-Pacific region - Monetary policy: - Must maintain a sufficiently restrictive stance until inflation is firmly back on target. - With accommodative financial conditions in Asia’s emerging markets, there is no urgent need to ease monetary policy. - Fiscal policy: - Fiscal consolidation should continue to address rising debt servicing costs, through credible medium-term fiscal frameworks. - Faster and more efficient coordination on debt resolution is needed to ease funding stresses faced by some emerging market and developing economies. - Macroprudential policy: - Use macroprudential policies to tackle financial sector vulnerabilities driven by the higher-for-longer interest rate environment. - Structural and multilateral priorities: - Structural policies to boost productivity and strengthen multilateral cooperation are urgently needed to mitigate medium term output losses and risks posed by global de-risking. - Address rising inequality and facilitate the green transition to ensure inclusive and sustainable growth. *Opening Remarks by IMF Asia and Pacific Department Director Krishna Srinivasan at the Regional Economic Outlook Press Conference, Marrakesh, Morocco, October 13, 2023* --- ## References - [People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm) - [Japan and the IMF](http://www.imf.org/external/country/JPN/index.htm) - [Morocco and the IMF](http://www.imf.org/external/country/MAR/index.htm) - [Speeches](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2023/10/12/sp101323-apdpresser-ksopeningremarks_