The report emphasizes that strong consumption and investment in Asia and better-than-expected external demand have promoted the recovery of economic growth. At the same time, due to various risks, including rapid credit growth in China, rising protectionism and geopolitical tensions, policymakers in various economies will continue to accelerate the pace of reform.
Li Changyong, director of the Asia-Pacific Department of the International Monetary Fund, said that Asia's economic growth momentum is still strong, so it is in a favorable position. The favorable factors in this region provide opportunities for implementing various structural reforms and solving various vulnerabilities.
At present, the financial situation in Asia is also favorable, thanks to the massive inflow of capital in the first half of this year. Although the forecast of economic growth prospects has been improved, the inflation rate this year has been lowered to 2.3%, which is 0.6 percentage points lower than the forecast in April this year, mainly due to the fall in commodity prices and the appreciation of the local currency.
However, the economic growth in Asia is strong but uneven, and the overall rebound of economic growth in this region can be attributed to the stronger-than-expected economic growth of China, Japan, South Korea and ASEAN countries, which helps to offset the weakening growth prospects of Australia and India. China, in particular, as the largest economy in the region, is expected to achieve 6.8% economic growth this year and 6.5% next year.
The upward adjustment of China's economic growth this year reflects that China's infrastructure expenditure in the first half of the year is still strong, and the real estate sector has a strong ability to resist risks. China has the potential to maintain strong economic growth in the next three to five years.
The report pointed out that the risks and challenges facing Asia's economic growth in the future coexist. On the positive side, due to increased confidence and more favorable market conditions, China's economic growth and Japanese cyclical recovery may be stronger and more lasting than expected. However, the sudden tightening of the global financial environment may trigger destructive capital outflows, which will particularly affect emerging and developing economies in Asia and weaken their growth prospects. Asian economies are particularly vulnerable to protectionism because of their open trade and integration with global value chains. If the world turns to an inward-looking policy, it may curb Asian exports and reduce foreign direct investment in the region.