Phnom Penh, April 19, 2024 – The International Monetary Fund (IMF) has identified India and Cambodia as standout performers in terms of economic growth during the latter half of last year. At a briefing in Washington on Thursday evening, Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, emphasized the robust growth observed across Asia.
ASIA LEADS IN GLOBAL GROWTH:
Srinivasan noted, "Asia is expected to contribute 60 percent to global growth this year, with inflation rates improving and performing better than other regions. However, there remains significant disparity within the region itself."
He highlighted that the second half of 2023 brought some positive surprises from both large economies like India and smaller ones such as Cambodia. On the contrary, some countries like Thailand did not perform as well as anticipated.
ECONOMIC GROWTH FIGURES:
According to the IMF’s World Economic Outlook, released earlier this week, India’s GDP growth reached 7.8 percent last year, while Cambodia, along with Indonesia and Vietnam, grew by 5.0 percent. In comparison, Thailand’s growth was relatively modest at 1.9 percent.
The report also provided an optimistic outlook for the Philippines, which outpaced its Southeast Asian peers with a growth rate of 5.6 percent. Other ASEAN economies showed varied growth, with Laos and Malaysia each growing at 3.7 percent, and Singapore at a slower rate of 1.1 percent.
FORECAST AND FUTURE PROJECTIONS:
Looking ahead, growth in India is expected to moderate to 6.8 percent this year. The IMF projects the Philippines will once again lead the ASEAN bloc with a growth rate of 6.2 percent, followed closely by Cambodia at 6.0 percent and Vietnam at 5.8 percent.
INVESTMENT AND CONSUMPTION AS GROWTH DRIVERS:
"In China and India, investment, predominantly public in India, is expected to be a major driver of growth," Srinivasan added. He also noted that robust private consumption would continue to be the main growth engine for emerging Asia, outside of China and India.
ECONOMIC CHALLENGES AND GLOBAL FRICTIONS:
The economic landscape is not without its challenges. Srinivasan pointed out mixed signals from China’s economy, with strong manufacturing data but a subdued property sector. He also raised concerns about potential economic frictions, such as those stemming from recent geopolitical tensions and trade restrictions, which could impact the region’s longstanding benefits from trade integration.
The IMF economist concluded by stressing the risk of geo-economics fragmentation, highlighting its potential to significantly affect Asia, a region that has greatly benefited from trade integration.
