2023 New Year Resolutions for Asia’s Biggest Economies
The DiplomatAsia’s big economies failed to fire during 2022, weighed down by the continuing COVID-19 pandemic and resulting self-imposed restrictions on economic activity, together with rising interest rates and slowing growth globally. In its latest “World Economic Outlook” report, the IMF projected GDP growth for Asia’s second-largest economy of 2.1 percent in 2022 but just 0.9 percent in 2023, below the average for advanced economies of 1.3 percent next year. However, with inflation remaining above the central bank’s target band of 2 to 6 percent, the RBI raised rates in December for the fifth month in a row, describing the inflation battle as “not over.” Nevertheless, the Indian economy is still set to be among the world’s fastest growing in 2023. Projecting a 6.9 percent GDP expansion, the World Bank said, “India’s economy is relatively insulated from global spillovers compared to other emerging markets… partly because India has a large domestic market and is relatively less exposed to international trade flows.” Yet critics say that Indian Prime Minister Narendra Modi lacks a coherent plan to cut red tape, increase productivity, and invest in improved education and training. With a median age of just 27.9 years compared to Japan’s 48.7 years and South Korea’s 43.9 years, India’s “demographic dividend” should yield increased growth for some time to come.