The International Monetary Fund (IMF) has upgraded its growth projections for five ASEAN member countries, including Indonesia, Malaysia, the Philippines, Singapore, and Thailand, in its latest World Economic Outlook released on July 25. The IMF revised its forecast up by 0.1 percentage point to 4.6% for this year, reflecting improved economic conditions in the region. However, the forecast for next year was adjusted downward by 0.1 percentage point to 4.5% after an expansion of 5.5% in 2022.
Meanwhile, the IMF maintained its growth forecast for emerging and developing Asia at 5.3% for this year but lowered the projection for next year by 0.1 percentage point to 5.0%, following a 4.5% growth in 2022.
The report also revealed that China’s economic growth forecast remains unchanged at 5.2% for this year and 4.5% for the following year, following a growth rate of 3.0% in 2022.
India’s economic growth forecast for this year received a 0.2 percentage point boost to 6.1%, while the projection for next year remained steady at 6.3%, following a robust expansion of 7.2% in 2022.
According to the report, consumption growth has seen widespread improvement as forecasted in April. However, investment faced a significant decline due to the prolonged downturn in the Chinese real estate sector. On the other hand, stronger-than-expected net exports are helping offset the investment weakness, though the support from such factors has diminished due to the global economic slowdown.
The upward revision in India’s economic growth projection is attributed to a stronger-than-expected performance in the fourth quarter of 2022, primarily driven by robust domestic investment.
While the IMF raised its forecast for US economic growth this year by 0.2 percentage points to 1.8%, it lowered the projection for next year by 0.1 percentage point to 1.0% after a 2.1% expansion in 2022.
Overall, the IMF raised its global economic growth forecast for 2023 to 3.0% from 2.8% in April. However, the projection for next year remains steady at 3.0% after a 3.5% expansion in 2022.
Despite the improved outlook, IMF chief analyst Pierre-Olivier Gourinhas urged caution, stating that numerous challenges still lie ahead, and it is premature to celebrate the positive growth prospects fully. As global economic conditions continue to evolve, policymakers and businesses need to remain vigilant and responsive to navigate through the uncertainties and opportunities on the horizon.