Still going steady at the top; and in the world. So far, at any rate, investment and private consumption drive growth in what still remains the world's fastest-growing economy, this said the International Monetary Fund, in its latest Regional Economic Outlook for Asia-Pacific on Friday.
The report stated that the IMF World Economic Outlook report released last on October 2 retains GDP growth forecasts for the economy at a robust 7 per cent and 6.5 per cent, for FY25 and FY26, respectively.
The report says Asia will grow more slowly in 2024 and 2025 as support from pandemic recovery fades and demographics continue to erode, although short-term prospects were brighter than April forecasts.
The IMF said growth for the Asia Pacific region in 2024 was revised up marginally by 0.1 percentage point to 4.6 per cent, mainly due to the strong performance in the early part of the year. This means the Asia and Pacific region will account for about 60 per cent of global growth this year.
However, "the outlook is subject to sizable economic and geopolitical uncertainties," the report said.
A blog post by the IMF accompanying its regional outlook report concluded that although manufacturing had been a source of growth for Asia, moving into modern, tradable services might be a new avenue of growth and productivity.
It pointed out that service sector expansion has already lured nearly half of the region's workers into its ranks, from just 22 percent in 1990, as hundreds of millions moved from farms and factories.
This shift is going to gather pace with increased trade across borders in high-technology services like finance, information, and communication technologies as well as business outsourcing, as done earlier in India and Philippines," the blog added.
Monetary conditions should prove even more accommodative this year, boosting activity by another 0.1 per cent, moving upward the growth estimate by that marginal amount to 4.4 per cent in April from 4.3 per cent. Inflation has abated in much of the region. At the same time, risks have mounted, reflecting increasing geopolitical tensions, uncertainty over the strength of global demand, and potential for financial volatility. Demographic change will increasingly serve as a brake on activity, though structural shifts into high-productivity sectors such as tradable services hold promise to sustain robust growth, the report added.
Read also| GST Collections Rise by 8.9% Year-on-Year to Rs 1.87 Lakh Crore in October
Read also| India's Core Industries Grow by 2% in September, Driven by Coal and Cement
