The IMF has delivered an upbeat assessment on prospects for the Asia-Pacific, forecasting growth of 5.6 percent for this year and the next.
CGTN’s Daniel Ryntjes reports.
“The economic outlook for Asia-Pacific remains strong and the region continues to be the main growth engine of the global economy,” Changyong Rhee, director of the IMF’s Asia and Pacific Department said.
It’s being driven by solid growth in China, India and Japan. But the Fund is warning that the region’s exposure to global trade puts it at risk if the U.S. and China aren’t able to resolve their trade differences.
“Geopolitical tension could have serious repercussions on financial markets and on the real economy,” Rhee added.
Globally public and private debt levels have risen to 225 percent, or $164 trillion in 2016. The IMF singled out China’s debt growth as a potential risk that is now being effectively addressed.
“These reforms are underway. They cannot be done in one or two years, said Deputy Director of the IMF’s Asia and Pacific Department, Markus Rodlauer. “They require a sustained long-term effort to address these risks. But overall we are quite optimistic that the authorities will again find a way through these challenges.”
The longer term risks identified by the IMF are related to slowing productivity, the automation of many jobs and the idea that Asia becomes old before it becomes rich. But the Fund says Asia is taking advantage of the opportunity to use developments in the digital economy to broaden opportunities and financial inclusion.