{
  "title": "Asia’s Prospects for A Soft Landing Have Improved",
  "publication": "IMF News, January 31, 2024",
  "sourceUrl": "https://www.imf.org/en/news/articles/2024/01/30/013124-apdreo-presser-opening-remarks",
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  "summary": "Remarks by Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department at a Press Conference on the Regional Economic Outlook, Tokyo, January 31, 2024",
  "publishDate": "2024-01-31",
  "sections": [
    {
      "heading": "Global developments",
      "content": "- Global growth projections:\n  - 3.1 percent growth for 2024—the same growth rate as in 2023.\n  - 3.2 percent projected for 2025.\n  - Historical (2000-2019) average for global growth: 3.8 percent.\n- Global inflation projections:\n  - 6.8 percent in 2023.\n  - 5.8 percent in 2024.\n  - 4.4 percent in 2025.\n- Drivers supporting 2023 activity:\n  - Stronger private and government spending despite tight monetary conditions.\n  - Supply-side supports: higher labor force participation, unwinding of supply chain bottlenecks, and lower energy prices.\n- Note: Current projections are somewhat better than the October 2023 World Economic Outlook but remain below the 2000-2019 average."
    },
    {
      "heading": "Asia—growth outlook and recent revisions",
      "content": "- Regional growth estimates and revisions:\n  - 2023 estimated growth: 4.7 percent (up from 4.6 percent projection in October).\n  - 2024 upgraded regional growth forecast: 4.5 percent (from 4.2 percent in October).\n  - 2025 projected regional growth: 4.3 percent, reflecting largely China’s slowdown.\n- Contributors to upward revisions:\n  - China and India account for most of the upward revision for 2023.\n  - China: higher spending on disaster reconstruction and resilience projects.\n  - India: strong domestic demand underpinning increased growth estimate.\n  - More supportive external environment, notably robust growth in the United States.\n  - Pick-up in demand for technology—computers, electronics, and optical products—benefiting Korea and Singapore.\n  - Sizeable policy stimulus announced by countries like China and Thailand.\n- Asia’s share of global growth:\n  - Asia is on-track to deliver again two-thirds to global growth in 2024, as it did in 2023."
    },
    {
      "heading": "Country divergences (selected)",
      "content": "- Japan:\n  - Growth expected to slow from about 2 percent in 2023 to about 1 percent in 2024.\n  - One-off factors in 2023 that fade: a depreciated yen, strong tourism, and a recovery in business investment.\n- India:\n  - Growth expected to remain strong at 6.5 percent in both 2024 and 2025.\n- China:\n  - Growth slowdown is a major factor in the regional deceleration projected for 2025."
    },
    {
      "heading": "Inflation, monetary policy, and exchange rates in Asia",
      "content": "- Regional inflation trends:\n  - Average Asian inflation fell from 3.8 percent in 2022 to 2.6 percent in 2023.\n  - Many regional central banks are on course to reach their inflation targets in 2024.\n  - Scope for monetary easing may emerge later in the year if policymakers hold steady until inflation is firmly re-anchored.\n- Country-specific inflation notes:\n  - China: inflation was 0.3 percent in 2023, raising deflation concerns; weakness mainly from lower food and energy prices and subdued core inflation. Inflation is expected to recover gradually through 2025.\n  - Japan: inflation 3.2 percent in 2023; expected to slow but remain above the 2 percent inflation target until 2025.\n- Interest rate and exchange rate dynamics:\n  - In the second half of 2023, the U.S. Federal Funds rate exceeded the average policy rate in Emerging Asia, triggering depreciation pressures on Asian currencies in the fall of 2023.\n  - Those pressures have abated as the Federal Reserve signaled interest rate cuts going forward.\n  - Risk remains that divergent monetary stances between the United States and Asia could trigger sharp exchange rate movements; central banks should focus on price stability and avoid being distracted by temporary turbulence."
    },
    {
      "heading": "Key risks and scenarios",
      "content": "- Downside risks:\n  - A larger and more drawn-out correction in China’s property sector could curtail domestic demand, especially if accompanied by stress in local government finances, and would reduce demand for the region’s exporters.\n  - Tighter-than-expected financial conditions in the United States or Asia could put pressure on heavily indebted industries and economies.\n  - Rising risks of geopolitical fragmentation that increase the costs and inefficiencies of supply chains and raise shipping costs.\n- Upside scenario:\n  - Stronger-than-expected policy support in China could boost domestic demand and generate positive spillovers for the region."
    },
    {
      "heading": "Policy priorities for Asia",
      "content": "- Fiscal policy:\n  - Fiscal consolidation is key to restoring buffers and safeguarding debt sustainability.\n  - 2023 budgetary balances improved somewhat in Asia, but consolidation was slower than anticipated—additional belt-tightening will be needed.\n- Financial sector:\n  - Strong financial supervision and systemic risk monitoring to safeguard against potential financial sector vulnerabilities.\n- Structural policies:\n  - Structural reforms to boost productivity and mitigate challenges from global de-risking.\n  - Accelerate the green transition as essential for sustainable growth."
    },
    {
      "heading": "IMF cooperation with Japan",
      "content": "- Areas of cooperation:\n  - Close work through the IMF’s regional office in Tokyo.\n  - Acknowledgement of Japan’s support for IMF initiatives.\n- Examples of Japan’s contributions (high-level):\n  - Support for meeting IMF’s fundraising targets for the Poverty Reduction and Growth Trust (PRGT) through loan resources and a subsidy contribution.\n  - Contributions in 2022-23 to the Resilience and Sustainability Trust (RST).\n  - Raised pledge regarding SDR channeling, strengthening IMF’s ability to support low-income and vulnerable member countries.\n- Japan’s role:\n  - An important thought leader in discussions of SDR channeling and a crucial and reliable partner of the Fund in its support for low-income countries.\n\nRemarks by Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, Press Conference on the Regional Economic Outlook, Tokyo, January 31, 2024.\n\n---\n\n\n References\n\n- Transcript of the Press Briefing, Tokyo, January 31, 2024\n- Press Briefing by Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department on the Latest Economic Outlook for the Region, Tokyo, January 31, 2024\n- People's Republic of China and the IMF\n- India and the IMF\n- Japan and the IMF\n- United States and the IMF\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/01/30/013124-apdreo-presser-opening-remarks"
    }
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    "Published: January 31, 2024",
    "Global growth projections:",
    "Global inflation projections:",
    "Drivers supporting 2023 activity:",
    "Note: Current projections are somewhat better than the October 2023 World Economic Outlook but remain below the 2000-2019 average.",
    "Regional growth estimates and revisions:",
    "Contributors to upward revisions:",
    "Asia’s share of global growth:",
    "Japan:",
    "India:",
    "China:",
    "Regional inflation trends:",
    "Country-specific inflation notes:",
    "Interest rate and exchange rate dynamics:",
    "Downside risks:",
    "Upside scenario:",
    "Fiscal policy:",
    "Financial sector:",
    "Structural policies:",
    "Areas of cooperation:",
    "Examples of Japan’s contributions (high-level):",
    "Japan’s role:",
    "[Transcript of the Press Briefing, Tokyo, January 31, 2024](https://www.imf.org/en/news/articles/2024/01/31/tr013124-press-briefing-regional-economic-outlook-asia-pacific-department)",
    "[Press Briefing by Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department on the Latest Economic Outlook for the Region, Tokyo, January 31, 2024](https://www.imf.org/en/videos/view/6345962126112)",
    "[People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)",
    "[India and the IMF](http://www.imf.org/external/country/IND/index.htm)",
    "[Japan and the IMF](http://www.imf.org/external/country/JPN/index.htm)",
    "[United States and the IMF](http://www.imf.org/external/country/USA/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)"
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