(MENAFN) According to Chetan Ahya, chief Asia economist at Morgan Stanley, Asia’s economic growth is expected to outpace both the US and Europe this year. Ahya cited strong domestic demand as the key factor driving the region’s growth, with China, India, Indonesia and Japan showing robust domestic demand. He expects the region’s growth to outperform by about 500 basis points by the end of this year. This forecast aligns with the latest International Monetary Fund (IMF) view that the Asia Pacific region remains dynamic despite the challenging year for the world economy. The IMF projects that the region will contribute more than 70 percent of global growth this year, with its expansion accelerating to 4.6 percent from 3.8 percent last year.
Ahya noted that China’s recovery is going better than expected due to the supportive fiscal and monetary policies, adding that he doesn’t see inflation as a major risk for the country. He stated that the country’s property sector is rebounding sharply, which will add to the growth momentum, as evidenced by the recent first-quarter survey by the People’s Bank of China that showed an increase in the number of people wanting to buy houses again.
The World Bank also expects East Asian and Pacific economies to grow more than it previously estimated due to a sharp rebound in activities in China. India also shows strong growth potential due to cyclical factors, according to Ahya. He noted that the banking system has been cleaned up, and the corporate sector has delivered. As a result, there has been a “nice acceleration in credit growth” because there is risk appetite seen in both borrowers and lenders.
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Source: menafn.com
