Asia continues to power ahead as the engine of the global economy, with the region expected to contribute a massive 60% to world growth in 2024, a senior International Monetary Fund (IMF) official stated on Monday.
Speaking at the 13th IMF-Japan High-Level Tax Conference for Asian Countries in Tokyo, IMF Deputy Managing Director Okamura highlighted Asia’s lead role in driving global economic recovery post-pandemic citing the IMF’s latest World Economic Outlook projections.
The global economy has exhibited surprising resilience amid successive shocks, with the IMF forecasting 3.1% growth in 2024. Meanwhile, Asia is also ahead of the curve on taming inflation with most countries expected to meet central bank targets this year, the official said.
However, Okamura cautioned that challenges remain, including high debt levels after pandemic spending, rising debt-servicing costs, and growing demands for public expenditure on areas like aging populations and climate change.
“In this difficult environment for government budgets, mobilizing domestic revenues is essential to meet growing spending demands and build resilience against future shocks,” he said.
The IMF sees significant potential for emerging markets and developing economies to boost tax-to-GDP ratios by up to 9 percentage points on average.
Among major economies, India is projected to remain the fastest-growing in 2024, with the IMF raising its growth forecast to 6.8% from 6.5% previously. The robust domestic demand, rising working-age population, and demographic dividend are cited as key drivers.
Countries with a demographic dividend could help support growth in the global workforce, in which nearly two in every three new entrants over the medium term will come from India and sub-Saharan Africa, IMF noted in its latest World Economic Outlook report.
According to India’s official data, the country grew at a massive 8.4% during the October-December quarter of the financial year 2023-24 and the country continued to remain the fastest-growing major economy.
The Indian economy grew 7.8% and 7.6% during the preceding two quarters – April-June and July-September. India’s economy grew 7.2% in 2022-23 and 8.7% in 2021-22, respectively.
China’s growth for 2024 is pegged at 4.6%, while the overall global economy is expected to expand by 3.2% this year and next, as per IMF estimates.
Despite many gloomy predictions, the world avoided a recession, the banking system proved largely resilient, and major emerging market economies did not suffer sudden stops, the IMF had said.
(Inputs from ANI)