United Nations in its report on the world economic situation and prospects predicted a worsening outlook in most developing regions amid the fear of a possible recession.
The report stated that growth in China is projected to moderately improve in 2023 after the weaker-than-expected performance in 2022.
Notably, amid recurring Covid‑19- related lockdowns and prolonged stress in the real estate market, the economy expanded by only 3 per cent in 2022.
With the government abandoning its zero-Covid‑19 policy in late 2022 and easing monetary and fiscal policies, economic growth is forecast to accelerate to 4.8 per cent in 2023.
It added, "But the reopening of the economy is expected to be bumpy. Growth will likely remain well below the pre-pandemic rate of 6 to 6.5 per cent."
As per the report, economic recovery in East Asia remains fragile, although average growth is stronger than in other regions. In 2023, GDP growth in East Asia is forecast to reach 4.4 per cent, compared to 3.2 per cent in 2022, mainly reflecting the modest recovery of growth in China.
Yet many economies in the region (other than China) are losing steam amid fading pent-up demand, rising living costs and weakening export demand from the United States and Europe.
This coincides with a tightening of global financial conditions, and countries adopting contractionary monetary and fiscal policies to curb inflationary pressures.
It added that although the expected recovery of China’s economy will support growth across the region, any surge in Covid‑19 infections may temporarily create slowdowns.
For South Asia, the UN report mentioned that economic outlook has significantly deteriorated due to high food and energy prices, monetary tightening and fiscal vulnerabilities. Average GDP growth is projected to moderate from 5.6 per cent in 2022 to 4.8 per cent in 2023.