Building on Asia’s Strengths during Turbulent Times
IMF
Download Document| Date Published | April 2016 |
| Version | |
| Primary Author | IMF |
| Other Authors | |
| Theme | Housing Market & Urban Indicators |
| Country | Australia, Korea, Republic of, New Zealand |
Abstract
Although growth in the Asia-Pacific economies is expected to decelerate slightly to about 5¼ percent during 2016–17, the area remains the most dynamic region of the global economy. Asia’s growth moderation partly reflects a still-weak global recovery and ongoing but necessary rebalancing in China. Downside risks have also increased. With external demand faltering, domestic demand should remain a major driver of activity across most of the region. Domestic demand, particularly consumption, will continue to be propelled by robust labor market conditions, lower commodity prices, and disposable income growth, along with, in some countries, macroeconomic stimulus. These factors will partially cushion the blow from languid external demand and increasingly tighter financial conditions. To strengthen the region’s resilience to global risks, policymakers should push ahead with structural reforms to raise productivity and create fiscal space while supporting demand as needed.