While developing Asia has enjoyed solid growth since the global financial crisis and some countries are even gaining stronger growth momentum, it faces increasing headwinds and heightened uncertainty. Regional growth slowed from 6.2% in 2017 to 5.9% in 2018 and is set to moderate further to 5.7% this year and 5.6% in 2020. Excluding the newly industrialized economies (Hong Kong, China; the Republic of Korea; Singapore; and Taipei,China), growth decelerated from 6.6% in 2017 to 6.4% in 2018, and will slow further to 6.2% and 6.1% in the following two years. This slowdown is taking place in an environment of rising global uncertainty due to several factors:
- weakening growth in major advanced economies;
- uncertainty over Brexit;
- the growth moderation of the People's Republic of China (PRC);
- trade conflicts between countries, including the United States and PRC;
- possible unforeseen changes in global liquidity conditions;
- spillovers from unexpected events such as shocks to emerging markets outside the region; and
- possible impacts from political and geopolitical developments within Asia and the Pacific.
The roundtable focused on what the region’s economies must do to maintain stability and growth momentum in the face of heightened global uncertainty. Discussion questions included:
- What is the appropriate response to the heightened uncertainty in terms of fiscal, monetary, and structural policies? Do the region’s economies have sufficient policy space to respond?
- What role should macroprudential policies and capital flow management play?
- How should countries work together to promote global trade, while responding to the challenges arising from globalization and technological progress?
- Amid this uncertainty, how can governments continue to tackle long-term issues such as promoting growth potential, addressing inequality, ensuring fiscal and debt sustainability, and protecting the environment?