(PLO)- 2023 is forecasted to continue to be a relatively challenging year for Asian economies, although compared to other places, the growth prospects in this region are somewhat more optimistic.
In the gloomy overall picture of the world economy in 2022, the Asia-Pacific region is not immune to “headwinds” affecting the recovery and growth. That is rising inflation leading to tightening monetary policy, Russia-Ukraine conflict, and China’s (China) economy slowing down.
However, while European countries were engulfed in a state of hyperinflation, a severe energy crisis and slowing economic growth, Asia emerged as a relative bright spot. Typically, Vietnam has an impressive growth of 8.02% in 2022, the highest in more than 10 years, Singapore grows 3.8% or India overtakes the UK to become the fifth largest economy in the world.
Demographics are also a headache for the region. India, which is expected to soon overtake China as the most populous country on the planet, has a young population and faces a shortage of jobs and infrastructure to support population growth. Meanwhile, Japan faces a drastic drop in the birth rate, which the government calls a “critical situation”. Any of the above trends will also have a great impact on the economy and society, according to Nikkei Asia.
It’s been 2023 but the challenges of the old year are still there. With the Asian economy, in addition to relatively optimistic forecasts, it is necessary to pay attention to cautious predictions, in the context of a declining global growth outlook and major economies on the brink of recession. .
Relatively optimistic
The most optimistic signal, up to this point, most forecasts are that Asia will not fall into a recession in 2023. This provides “lights of hope” in the context of global economic difficulties. , especially when the Director General of the International Monetary Fund (IMF) Kristalina Georgieva warned on January 1 that a third of the global economy will fall into recession in 2023, due to the main drivers of world growth. The world is in a period of decline.
In a recent forecast report on Asia’s economic situation in 2023, financial analysis company Moody’s Analytics (USA) assessed that Asian countries are on the way to recovery. 3.2% in 2022 to 3.5% in 2023. S&P Global Market Intelligence (financial information services provider – US) also forecasts Asian economies, which generate 35% of GDP of world, will dominate global growth this year at 3.5%, while Europe and the US are likely to fall into recession. This is supported by regional free trade agreements, efficient supply chains and competitive costs.
The IMF, in its October 2022 World Economic Outlook, forecasts Asia will grow 4.3% in 2023, while the global economy is expected to grow only 2.7%.
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A market in the old town of Delhi. The Indian economy is expected to grow by 7% for the fiscal year 2022-2023. Photo: REUTERS |
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Vietnam’s impressive growth rate of 8.02% in 2022, the highest in more than 10 years. |
The opening of China – the world’s second largest economy will create a new impetus for the recovery of the region in particular and the world in general. Many banks have positive forecasts about China’s economic prospects in 2023, due to the rapid opening speed and stimulus measures from the Beijing government, according to CNN. In mid-December last year, Goldman Sachs (USA) raised its growth forecast for the Chinese economy in 2023 to 5.2% from 4.5% previously forecast. Societe Generale (France) revised its growth estimate for China to 5.3%, while investment bank Morgan Stanley (USA) increased its forecast to 5.4%.
China’s opening also brings an optimistic signal to the region’s tourism industry. According to analysts, industries and countries that rely heavily on Chinese tourists will see growth in 2023. CNN quoted Goldman Sachs analysts predicting that Hong Kong, Thailand, Vietnam and Singapore would be the biggest beneficiaries if Chinese tourists return to 2019 levels. In addition, the company’s research Capital Economics (UK) shows that other countries and regions such as Cambodia, Mauritius, Malaysia, Taiwan, Myanmar, Sri Lanka, South Korea and the Philippines will also benefit from the influx of Chinese tourists.
At the end of December 2022, Japan raised its forecast for GDP growth in 2023 to 1.5% from 1.1% forecast in July 2022. The size of nominal GDP is forecast to reach 571.9 trillion yen (about $4.3340 billion) in fiscal 2023, exceeding pre-pandemic levels, according to Kyodo News. According to the World Development Bank’s (ADB) December economic growth outlook report, Japan’s net exports are forecast to recover by the end of 2023 as a weak yen boosts commodity exports and domestic tourism. High savings and moderate wage growth should support household consumption despite rising inflation. However, the ADB forecasts Japan’s growth in 2023 at only 1.3%, lower than the government’s forecast.
India is considered a relative “bright spot” of the world economy. India’s Department of Statistics and Program Implementation calculates GDP growth at 7% for the fiscal year ending March 2023. With this growth, the Organization for Economic Co-operation and Development (OECD) said that India will be the second fastest growing economy, after Saudi Arabia, in the group of 20 major economies (G-20). “India has the conditions ready for an economic boom, fueled by investment in manufacturing as well as in manufacturing,” said Upasana Chachra, chief India economist at Morgan Stanley Investment Bank. offshore investment and energy transition”.
Need to be careful
According to forecasts, Asia will generally avoid a recession in 2023 and have growth, but Moody’s Analytics also warns that most economies in the region will see a slowdown in 2023 due to facing many challenges. global consciousness.
Exporting economies will face a decline in demand from European countries and the US in the face of a recession. Weak demand from China will also hinder growth in the region. Interest rates will remain high as central banks in the region may raise interest rates following the move of the US Federal Reserve (Fed) to protect the exchange rate and curb inflation, although inflation in The region is likely to gradually decline in 2023. In mid-December, ADB chief economist Albert Park cautioned that Asia’s “deteriorating global conditions mean regional dynamics.” is slowly disappearing”.
With the above challenging environment, DW radio quoted forecasts of the World Bank (WB), IMF and ADB that trade-oriented economies such as Singapore, Thailand, Vietnam and Malaysia will be affected by the pandemic. global economic slowdown. Expert Park advises that “countries need to work together more closely to overcome the persistent challenges of the COVID-19 pandemic, deal with the impacts of rising food and energy prices, as well as ensure comprehensive and sustainable economic recovery”.
With China, the regional economic locomotive, the IMF points out three risks to its growth in 2023, including the prolonged impact of the “zero-COVID” policy, global trade stagnation, the significant drop in the real estate market, according to The Diplomat magazine.
In addition, IMF Director General Georgieva is concerned that in the next few months China will face difficulties when the number of COVID-19 cases increases sharply and this negatively impacts growth not only in China but also in the region and the world. gender. Bloomberg also said that the recovery of Asia’s largest economy will be the key to growth for the whole region and this depends on the situation of the COVID-19 epidemic in China and the degree of improvement in supply chain operations. global response.•
Japan and ASEAN study and share supply chain data
Nikkei Asia recently reported that Japan is expected to propose the sharing of supply chain data with ASEAN countries, as part of measures to strengthen economic ties with the region, in the context of the two sides’ orientations towards the region. to celebrate the 50th anniversary of ASEAN-Japan friendship and cooperation this year.
One content of the above proposal is to establish a system to share information on spare parts inventory, production capacity and supply chain disruption risks between Japanese and ASEAN companies in the automotive and electrical industries. electronics and other industries. Retailers and other companies can also participate in the data-sharing platform, contributing to the exchange of information about efforts to cut emissions.
In addition, the proposal will also include initiatives on sustainable development, joint research between universities and companies, as well as human resources. It is expected that the official decision will be made at the ASEAN – Japan Economic Ministers Consultation Meeting in August.
VINH KHANG