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Wednesday, January 25 2023 - 10:53
Despite global slowdown, Asia's economies show resilience and growth for 2023 – according to Asia House's Annual Outlook
LONDON, January 24, 2023 /PRNewswire-AsiaNet/--

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 

The 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 

- The Philippines is likely to grow, which presents an opportunity for the 
country's policymakers to improve the domestic ecosystem for green finance and 

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

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 

SOURCE: Asia House