In an encouraging development for the economy, International Monetary Fund (IMF) in its latest economic health check report termed ‘India as the fastest growing economies in the world’, by estimating its growth rate at 7.5% this year and the next. Notably, according to the IMF's Regional Economic Outlook for Asia-Pacific, China’s economy was slowing to 6.8% GDP in 2015 and 6.3% in 2016.Further, it also forecasted that Growth in Asia-Pacific to continue to outperform the rest of the world, and remain steady at 5.6% in 2015, easing slightly to 5.5% in 2016.
It opined that this growth will be driven by domestic demand, underpinned by healthy labour markets, low interest rates, and the recent fall in oil prices. It also asserted that global recovery though would remain moderate and uneven, but will continue to support Asia’s exports.
IMF’s Regional Economic Outlook underlined the need for a strong push for structural reforms across most, if not all, economies in the region and further noted that structural reforms, besides boosting productive capacity could help rebalance growth toward consumption, which remains a priority for some major Asian economies.
Also, it highlighted that major reforms areas included measures to address supply-bottlenecks in India, state-owned enterprises, and financial liberalization in China, and initiatives to raise services productivity, and labour force participation in Japan. The report noted the opportunities that lower oil prices provided to undertake further fiscal reforms, which were aimed at lowering energy subsidies.
IMF in its report also said that Asia, which accounts for nearly 40% of global output, contributes nearly two-thirds of global growth, will remain the global growth leader, even though potential growth-the economy's speed limit-is likely to slow.