New Delhi, November 2 (IANS). According to the IMF’s latest regional economic outlook for Asia-Pacific, India remains the world’s fastest growing economy by investment and private consumption.
The IMF, in its World Economic Outlook report released on October 2, has retained India’s gross domestic product (GDP) growth forecast at 7 per cent and 6.5 per cent for FY2025 and FY2026, respectively.
The Regional Economic Outlook report said growth in Asia is expected to slow in 2024 and 2025, reflecting factors such as lack of support for the pandemic recovery and aging population. Moreover, short-term prospects in April were better than expected.
The IMF said it raised the growth forecast for the Asia Pacific region by 0.1 percentage points to 4.6 percent in 2024, mainly reflecting the strong performance at the beginning of the year. With this, Asia and Pacific region is expected to contribute about 60 percent to global growth this year.
However, the report said that “the outlook also depends largely on economic and geopolitical uncertainties.”
A blog post released by the IMF along with the regional outlook report said the manufacturing sector is driving growth in Asia but modern tradable services could be a new source of growth and productivity.
It says the growth in services has already brought almost half of the region’s workers into the sector, up from just 22 percent in 1990, as millions of people moved out of farms and factories.
“This change is likely to be accelerated by the expansion of international trade modern services such as finance, information, communication technologies and business outsourcing, as has already happened in India and the Philippines,” the blog post said.
More favorable monetary conditions in 2025 are expected to support activity, resulting in modest growth of 4.3 percent to 4.4 percent in April.
Inflation has declined in most parts of the region. At the same time, risks have also increased, reflecting rising geopolitical tensions, uncertainty over the strength of global demand and the potential for financial instability.
Demographic changes will sharply put the brakes on activity, although structural shifts in high-productivity sectors such as tradable services will sustain strong growth, the report said.
—IANS
SKT/AS
