Tokyo– The Asia-Pacific region will continue to lead global growth, the International Monetary Fund said on Tuesday and also alerted of the risk posed by protectionism, rapidly ageing populations and a fall in productivity, in the medium term.
The region has a robust economic perspective, with growth expected at 5.5 per cent for 2017 and 5.4 per cent for 2018, which are above the 5.3 per cent registered last year, the agency said during the presentation of its annual report, ‘Preparing for Choppy Seas’.
“The signs of growth in the region are encouraging so far. The policy challenge now is to strengthen and sustain this momentum,” Changyong Rhee, Director of the IMF’s Asia and Pacific Department, said in a statement.
The results are expected to boost the global average, which is forecast to be around 3.5 per cent for 2017 and 3.6 per cent for 2018, against the 3.1 per cent recorded in 2016, Efe news reported.
The IMF predicted a slight slowdown for China, with a growth rate of 6.6 per cent for 2017 and 6.2 per cent for 2018, owing to a slack in the real estate market and lower increases in salaries and consumption.
For Japan, the forecast for this year is pegged at 1.2 per cent, riding on the country’s fiscal policies, while South Korea is expected to grow at 2.7 per cent.
The forecast for India is 7.2 per cent for 2017, making it among the fastest growing economies in the world.
The IMF, in its report, while underlining the strong performance of the financial markets in Asia, also urged the countries in the region to take measures and adopt reforms against future risks.
In the short term, the IMF warned of a substantial risk posed by a possible shift towards protectionism, to which the region is particularly vulnerable owing to the degree of trade openness and participation in the global supply chain.
In the medium term, the IMF warned against problems posed by an ageing population, as the population of the region is currently ageing faster than Europe and the United States.
According to the IMF, several places in Asia run the risk of “getting old before becoming rich” and countries such as China, Hong Kong, South Korea, Japan and Thailand, could witness a slowdown of 0.5 to 1 percentage points in their gross domestic product over the next three decades. (IANS)