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Good times, uncertain times: A time to prepare
Asia-Pacific region remains the main engine of the global economy. Regional growth is expected to remain strong at 5.6 percent in 2018 and 2019.
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Asia-Pacific region remains the main engine of the global economy. Regional growth is expected to remain strong at 5.6 percent in 2018 and 2019. (Shutterstock/File)
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s we note in our recently released Regional Economic Outlook (REO), the Asia-Pacific region remains the main engine of the global economy, and near-term prospects have improved since our last report, in October 2017.
But there are many risks on the horizon, including a tightening of global financial conditions, a shift toward protectionist policies and an increase in geopolitical tensions. In addition, over the longer run, Asian economies will face major challenges from population aging and slowing productivity growth, as well as the rise of the digital economy, which could yield huge benefits but also bring major disruptions.
Given the many uncertainties, macroeconomic policies should be conservative and aimed at building buffers and increasing resilience, while taking advantage of strong economic conditions to implement structural reforms to promote sustainable and inclusive growth.
Regional growth is expected to remain strong at 5.6 percent in 2018 and 2019 — up by about 0.1 percentage points from our previous forecast — supported by strong global demand and favorable financial conditions. As in other regions, inflation in Asia has largely remained subdued despite the pickup in growth.
