Krishna Srinivasan, the IMF Director for the Asia-Pacific region, has shared an optimistic economic outlook for Asia, highlighting its rapid reduction of inflation and robust growth potential. He announced an upgraded regional growth forecast of 4.6% for 2024 and 4.4% for 2025, driven by stronger-than-expected performance in the first half of the year.

Srinivasan said that Asia contributes 60% of global growth despite representing only 40% of global GDP. He expects domestic demand in advanced Asian economies to strengthen, with resilient growth projected for India and China, although a slight slowdown is anticipated in 2025.

While inflation in Emerging Asia has stabilized, wage pressures in Australia and New Zealand continue to elevate services inflation, which is expected to ease in the next year. This economic landscape may allow for earlier interest rate cuts as central banks respond to easing from the Federal Reserve.

Srinivasan emphasized the need for careful navigation of monetary and fiscal policies, advocating for budget reconsolidation to prepare for long-term challenges like climate change and an aging population.