PR99502

LONDON, January 24, 2023 /PRNewswire=KYODO JBN/--

Asia can defy a global economic slowdown in 2023 through an acceleration in

digital transformation, greater regional coordination, and balanced monetary

policies, according to new research from the London-based think tank, Asia

House.

The Asia House Annual Outlook 2023

[https://asiahouse.org/wp-content/uploads/2023/01/asia_house_annual_outlook_2023

.pdf] examines how Asia's economies can prevail and deliver robust growth

through increased domestic demand for goods and services, countering the global

headwinds of high inflation, tighter monetary policy and increasing

geopolitical tensions.  

Key among the Annual Outlook's recommendations are those relating to

prioritising innovation – to spur carbon pricing, lower green premiums for

zero-carbon alternatives, and boost underfunded and high-impact projects with

blended finance.

'Asia is likely to prove resilient if investment and financial flows are

directed to digital and green innovation to underpin sustainable growth and

investment,' the Annual Outlook finds.

However, and mirroring the global outlook, Asia is susceptible to risk and

faces multiple and multi-faceted shocks, such as energy-price volatility,

geopolitical conflict, and higher borrowing costs.  

Asia House assessed eight key economies in Asia across metrics conducive to

meeting these challenges. In two indices published today, the think tank

analyses the performance of China, India, Indonesia, Japan, Malaysia, the

Philippines, Thailand, and Vietnam in the critical areas of green finance and

digitalisation readiness – areas that will unlock future productivity and

enable sustainable growth across the continent.

Asia House's Economic Readiness Indices suggest that prioritising economic

readiness to tackle both climate change and digitalisation, and the policies

that link the two, will create higher growth.

- China will see increased growth – albeit sluggish – having abandoned its

zero-Covid policies.  It also shows an improvement in its scores for economic

readiness for green finance.

- India will see continued economic recovery and is on track to be one of the

fastest growing economies globally. However, the country is susceptible to

financial volatility and it has the lowest readings in readiness for both green

finance and digitalisation.

- Japan is likely to bear the brunt of multiple financial shocks, including a

weak yen and higher energy prices – both of which reduced its Readiness Index

for green finance. Japan's digital readiness scores improved for 2023.

- Vietnam is likely to register one of the strongest economic growth rates in

2023, owing in part to its vibrant external sector and domestic policy settings

that will catalyse inward investment.

- Malaysia is making significant strides, underpinned by the strength of

domestic demand and digitalisation.

- Thailand's economic readiness readings for green finance registered the

largest rise according to Asia House.

- Indonesia will show economic resilience in 2023. It has struck the right

balance in monetary policy in terms of encouraging growth while taming

inflation.

- The Philippines is likely to grow, which presents an opportunity for the

country's policymakers to improve the domestic ecosystem for green finance and

digitalisation.

View the Asia House Economic Readiness Indices in the Executive Summary here

[https://asiahouse.org/wp-content/uploads/2023/01/asia_house_annual_outlook_2023

_exec_summary.pdf]. The Indices form a part of the Annual Outlook, published by

the think tank to track key economic trends across Asia.

Asia House comment

Michael Lawrence, Chief Executive of Asia House: "Against the backdrop of a

weak global economic outlook for 2023, Asia's economies may defy the trend and

deliver robust growth despite the challenges of high inflation, rising interest

rates, fuel price volatility and geopolitical tensions.

"The Asia House Annual Outlook is published to give key insights into the

region's economies and increase understanding of the opportunities and

obstacles in Asia in an increasingly unpredictable and turbulent world".

Phyllis Papadavid, Director of Research and Advisory, Asia House: "Our outlook

indicates that Asia's growth prospects continue to hinge on an acceleration in

digital transformation, greater regional coordination, and striking the right

balance in broader monetary policy across the region.

"Furthermore, the Asia House Economic Readiness Indices suggest that

prioritising economic readiness for both climate change and digitalisation, and

the policies that link the two, will be essential for Asia's higher growth

trajectory."      

Policy recommendations

Drawing on the Indices, the Asia House Annual Outlook 2023 report includes

several recommendations for policymakers across Asia.

- Scaled-up regional coordination in Asia is necessary to bolster economic

integration further, particularly in the form of expanded economic zones and

investment corridors.

- Enhanced and coordinated reserve management is needed at a time when Asia's

reserves are declining.

- By adopting carbon-pricing mechanisms, the 'green-premium', or the additional

costs of opting for green technology, will be reduced.

- The leveraging of private investment and risk absorption will support

scaled-up sustainable finance.

- Innovations in blended finance – using development funds to spur private

investment – need to funnel capital into high impact and under capitalised

green projects.

- Asia's broader digital access and digital skills, particularly in the rural

sectors in its larger economies, is a policy gap.

Read the full Asia House Annual Outlook report here

[https://asiahouse.org/wp-content/uploads/2023/01/asia_house_annual_outlook_2023

.pdf]

SOURCE: Asia House