According to GlobalData’s June 2022 forecast, India (6.8%) will be the fastest growing economy in the APAC region, followed by the Philippines (6.7%), Malaysia (6.5 %) and Indonesia (5.3%) in 2022.
Economic growth in the Asia-Pacific (APAC) region is expected to slow more than expected due to Zero COVID in China politics, the perils of war in Ukraine and restrictive monetary conditions. Therefore, GlobalDataone of the leading data and analytics companies, revised down its 2022 growth forecast for the region from 4.7% in February to 3.9% in June.
According to GlobalData’s June 2022 forecast, India (6.8%) will be the fastest growing economy in the APAC region, followed by the Philippines (6.7%), Malaysia (6.5 %) and Indonesia (5.3%) in 2022.
Puja Tiwari, Economic Research Analyst at GlobalData, comments: “Government policies to improve logistics infrastructure, incentives to facilitate industrial production, as well as measures to improve farmers’ incomes are expected to support India’s economic growth.”
On the other hand, the economies of Thailand, Taiwan, South Korea and Japan are expected to experience slow growth rates of 3.4%, 3.3%, 2.7% and 1.7%, respectively, in 2022, due to the depreciation of national currencies against the dollar. , which was exacerbated by the US Federal Reserve (Fed) rate hike and rising inflationary pressures.
Major APAC economies including China, Japan, India and Indonesia have been experiencing local currency depreciation since the Fed raised its policy rate by 75 basis points on June 15, 2022.
Additionally, China’s economy has been hit by its zero-COVID policy and flooding in some regions, which has affected manufacturing output.
Tiwari continues: “GlobalData predicts that China’s economic growth rate will slow from 7.8% in 2021 to 4.1% in 2022. Since other APAC economies are closely tied to China through trade, a slowdown in China is expected to impact regional economic growth prospects.
The imbalance between supply and demand created by the Ukrainian crisis and the shortage of raw materials from China have led to high prices for final goods and services in the region. Consequently, GlobalData has revised the 2022 inflation rate forecast for the region from 3.2% in February 2022 to 5.2% in June 2022.
India is expected to experience the highest inflation rate of 6.5% in 2022 in the region, followed by Australia (5.1%), Singapore (5%) and Thailand (4.4 %), while Taiwan (2.8%), Malaysia (2.6%), China (2.2%) and Japan (1.9%) would experience the lowest inflation rate.
However, the APAC region is still expected to experience the fastest growth among all other regions in 2022. The Regional Comprehensive Economic Partnership (RCEP), effective from January 1, 2022, covers ASEAN countries as well as the Australia, China, Japan and New Zealand. , is expected to boost the business scenario in the region. Along with this, robust domestic demand following the lifting of COVID-19 related restrictions in major economies like China, India and Japan will play a pivotal role in the region’s economic growth in 2022.
Tiwari concludes: “Severe heat waves and rising domestic prices in India, devastating floods in China, high debt levels and political crisis in Sri Lanka and the fragile economies of Pakistan, and currency depreciation in major economies, make the region vulnerable. Major economic reforms continue to be the need of the hour for a sustainable economic recovery in the APAC region.
