Growth Outlook

Developing Asia is facing considerable headwinds. Delayed recovery in major industrial economies and moderating prospects for the large economies of the People's Republic of China and India weigh on region's project growth forecasts. With the european economy meltdown, asian economy continues to grow.

Emerging : Asia leads global growth

A key factor behind Asia's rising influence is the size of its economy. In 1990, the top five economies were not among Asia. However, now the top three economies are Japan, China and India.

Asia's share in world GDP in real US$ purchasing power parity (PPP) was 23.2 percent. By 2014, this went up to 38.8 percent, much larger than the shares of the United States and the European Union.

In fact, Asia's share is likely to go up in the coming years if current growth trends in key regional economies continue(forecasts by Oxford Economics put Asia's share at nearly 45 percent by 2025).

Growth Prospects in Asia

In 2017, 80% of regional economies are expected to post higher growth on the back of a recovery in external demand and further pickup in domestic demand.

Policies to stimulate potential growth

  • Partly offset the labor squeeze due to policy changes
  • Higher labor productivity

    • Capital investment is crucial to catch up with the advanced economies.
    • Reform can move current potential toward the frontier.
    • Sound macroeconomic management is the foundation for growth.
  • Employment of the full range of policy responses

Slow going in a Tough Global Environment

In 2017, growth in the region will remain steady, as continued growth moderation in the PRC will be counterbalanced by solid growth in India.

Average inflation in the region will rise from 2.2% in 2015 to 2.5% in 2016 on strengthening domestic demand and further to 2.7% in 2017, following an expected recovery in global commodity prices.

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