India, China, Southeast Asia will drive global market in 2023: Report

The fast-growing consumer markets of mainland China, India, and Southeast Asia will provide an important growth engine for the world economy.

Edited By Alka Jain
First Published23 Feb 2023
Asia to drive global growth in 2023. (Reuters)
Asia to drive global growth in 2023. (Reuters)

Asia's large emerging market economies will drive global growth in 2023, largely led by a gradual economic rebound in mainland China due to the easing of Covid-19 restrictions, said S&P Global Market Intelligence. 

In a report, the global financial market information and analytics services provider said that the fast-growing consumer markets of mainland China, India, and Southeast Asia will provide an important growth engine for the world economy. 

As domestic demand strengthens through 2023, the real GDP growth in China is forecast to rebound from 3% in 2022 to 5.2% in 2023, while the growth of the Asia-Pacific region is expected to contribute 58% of the total increase in world GDP from 2021 to 2031. 

In the UAE, conditions are set for a continued strong recovery of the non-oil economy in 2023. “The recovery of international tourism and ascending real estate prices signal that the recovery will continue in 2023. The non-oil economy accounts for 75% of the UAE economy,” the report said. 

It further said that the significant monetary policy tightening by the US Federal Reserve in 2022 and early 2023 will result in a growth slowdown in the country in 2023. 

The US real GDP growth is forecast to slow from 2.1% in 2022 to just 0.7% in 2023, the report added. 

The US central bank's policy rate is in a target range of 4.50% to 4.75%, the highest level in 15 years. Notably, it was near zero in the early part of 2022. Latest, the US Federal Reserve approved a quarter-point interest rate hike in January 31-February 1 meeting, to contain inflation.

Meanwhile, consumer inflation in the US moderated to 6.4% in January from 6.5% in December, and 7.1% the previous month but still is way above the 2% target.

Earlier on Wednesday, International Monetary Fund's Managing Director Kristalina Georgieva said that the Indian economy will alone contribute 15% of the global growth this year, as the country continues to remain a relative "bright spot" in the world economy.

For this year, the IMF expects India to retain a high growth rate, 6.8% for the year that ends in March.

At a time when the IMF is projecting this year to be difficult with global growth slowing down from 3.4% in 2022 to 2.9% in 2023, India remains a bright spot, Georgieva said.

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