KUALA LUMPUR: Asia is likely to prove resilient if investment and financial flows are directed to digital and green innovation to underpin sustainable growth and investment, Asia House annual outlook said.
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.
Chief executive officer Michael Lawrence said 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," he said in a statement today.
Asia House director of research and advisory Phyllis Papadavid said the company's 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," he said.
Drawing on the indices, the Asia House Annual Outlook 2023 report includes several recommendations for policymakers across Asia.
These include a scaled-up regional coordination in Asia to bolster economic integration further, particularly in the form of expanded economic zones and investment corridors.
Besides that, it also recommends an enhanced and coordinated reserve management is needed at a time when Asia's reserves are declining as well as the leveraging of private investment and risk absorption will support scaled-up sustainable finance.