New Delhi, Nov 24: Recession in the Asia-Pacific (APAC) region is unlikely to occur in the upcoming year, despite the region facing challenges from rising interest rates and weaker global trade growth, according to Moody’s Analytics.
According to Moody’s report titled “APAC Outlook: A Coming Downshift,” India will have slower growth in 2019 which is more in line with its long-term potential.
Positively, foreign direct investment and increases in agricultural and technological productivity could speed up growth. However, if high inflation continues, the Reserve Bank of India will probably raise its repo rate far over 6%, which will slow down GDP growth.
“China is not the only weak link in the global economy. The other giant of Asia, India, also suffered a year-to-year decline in value exports in October. At least India relies less on exports as an engine of growth than does China,” Moody’s Analytics Chief APAC Economist Steve Cochrane said.
Regarding the regional outlook, Moody’s stated that while China’s slowing economy and the anticipated slowdowns in Europe and North America will make 2023 a slower year for economic growth than 2022, even though India and other major economies in the APAC region are expanding due to their own delayed reopening from pandemic-related shutdowns.
“That said, a recession is not expected in the APAC region in the coming year, although the area will face headwinds from higher interest rates and slower global trade growth,” Cochrane added.
The International Monetary Fund (IMF) predicted that global growth will slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023 in its World Economic Outlook published last month. At a time when the world faces impending risks of a recession, India has emerged as “a bright light,” according to IMF chief economist Pierre-Olivier Gourinchas.