PHNOM PENH: Economic growth in Cambodia and India was unexpectedly strong in the second half of last year, the International Monetary Fund (IMF) says.
Speaking at a briefing in Washington Thursday evening, Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, said “growth has been better than expected in Asia.
‘LARGE DISPARITIES WITHIN THE REGION’
“In fact, Asia will contribute 60 percent to global growth this year, and inflation also is coming down and much better than other regions. But there are large disparities within the region.
“And for example, if you take the second half of 2023, we had positive surprises, not just from countries like India, which are big, but also smaller economies such as Cambodia.
“On the other hand, you also had countries which didn’t do as well as we expected, such as Thailand.”
According to the IMF’s World Economic Outlook released earlier this week, GDP growth last year was 7.8 percent in India, 5.0 percent in Cambodia, Indonesia and Vietnam, and 1.9 percent in Thailand.
The Philippine economy grew even faster than its Southeast Asian peers at 5.6 percent. Among other ASEAN economies, growth was 3.7 percent in both Laos and Malaysia, 2.5 percent in Myanmar, 1.4 percent in Brunei and 1.1 percent in Singapore.
Growth in India is forecast to slow to 6.8 percent this year.
Among the ASEAN economies, the Philippines is projected to again have the fastest growth (6.2 percent) followed by Cambodia (6.0 percent), Vietnam (5.8 percent), Indonesia (5.0 percent), Malaysia (4.4 percent), Laos (4.0 percent), Thailand (2.7 percent), Brunei (2.4 percent), Singapore (2.1 percent) and Myanmar (1.5 percent).
The IMF forecast China’s growth at 4.6 percent this year, down from 5.2 percent last year.
“In China and India, we expect investment to contribute disproportionately to growth, much of it public, especially in India,” Srinivasan said.
“In emerging Asia, outside China and India, robust private consumption will remain the main growth engine.”
Srinivasan said China’s economy was “critical for the region” but that recent data had been mixed.
China’s GDP in the first quarter of this year “surprised on the upside” and March readings for manufacturing and the purchasing managers index were “quite strong.”
But the property sector “remains subdued,” he said.
POSSIBLE FRICTIONS
Policies that boost China’s supply capacity would “reinforce deflationary pressures and could provoke frictions.
“Frictions could also emerge through other channels. For example, global conflict can undermine trade,” Srinivasan said.
The IMF economist noted that recent attacks on cargo ships in the Red Sea had forced a rerouting of vessels between Asia and Europe, driving up container prices.
“Such frictions reinforce the impact of trade restrictions that continue to be implemented at a rapid pace both in Asia and elsewhere.
“Few regions have benefited as much from trade integration as Asia. Hence, geoeconomic fragmentation continued to be a large risk.” AKP
