Recession unlikely in Asia-Pacific region in 2023, says report

Recession unlikely in Asia-Pacific region in 2023, says report


Moody’s said India is poised to slow growth next year in line with its long-term potential. (File)

New Delhi:

Moody’s Analytics today said a recession is unlikely in the Asia-Pacific (APAC) region in the year ahead, although the region will face headwinds from higher interest rates and slower global trade growth.

In its analysis titled ‘APAC Outlook: A Coming Downshift’, Moody’s said India is headed for a slower growth next year in line with its long-term potential.

On the upside, productivity gains in agriculture, along with inward investment and technology, can spur growth. But, if high inflation persists, the Reserve Bank of India will raise its repo rate above 6 per cent, which will cause GDP growth to falter.

In August, Moody’s forecast India’s growth to slow to 8 per cent in 2022 and 5 per cent in 2023, from 8.5 per cent in 2021.

It said the economies of the Asia-Pacific (APAC) region are slowing down and the trade-dependent region is feeling the effects of slowing global trade. Global industrial production remains “substantially level” as it peaked in February, just before Russia’s invasion of Ukraine.

“China is not the only weak link in the global economy. Asia’s other giant, India, also suffered a year-on-year decline in value exports in October. At least India relies less on exports as an engine of growth. China does,” said Steve Cochrane, principal APAC economist at Moody’s Analytics.

On the regional outlook, Moody’s said that even though India, as well as other major economies in the APAC region, are expanding due to delays in reopening from pandemic-related shutdowns, expected slowdowns in Europe and North America along with China’s sluggish economy Will be 2023 causes for economic growth to be a slower year than 2022.

“That said, a recession is not expected in the APAC region in the year ahead, although the region will continue to face headwinds from higher interest rates and slower global trade growth,” Cochrane said.

In its World Economic Outlook released last month, the International Monetary Fund (IMF) projected global growth to slow from 6 per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023.

IMF Chief Economist Pierre-Olivier Gaurinchas had said that India has emerged as “a bright light” at a time when the world faces imminent prospects of recession.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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