Potential Growth in Emerging Asia

Rahul Anand, Kevin Cheng, Sidra Rehman and Longmei Zhang

No 2014/002, IMF Working Papers from International Monetary Fund

Abstract: Using three distinct approaches—statistical filtering, production function, and multivariate model— this paper estimates potential growth for China, India, and five ASEAN countries (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) during 1993–2013. The main findings include: (i) both China and India have recently exhibited a slowdown in potential growth, largely reflecting a decline of total factor productivity (TFP) growth; (ii) by contrast, trend growth for the five ASEAN countries has been rather stable and might even have increased marginally, with the notable exception of Vietnam;(iii) over the longer term, demographic factors will be much more supportive in India and some ASEAN economies than in China, where working-age population should start shrinking, with the overall dependency ratio climbing by the end of this decade. Improving or sustaining potential growth calls for broad structural reforms.

Keywords: WP; ASEAN economy; China; economy; trend growth; India; potential growth; total factor productivity; emerging Asia; dependency ratio; inflation picture; non-accelerating inflation rate of unemployment; production function; Capital accumulation; Inflation; Aging; Labor force participation; Asia and Pacific (search for similar items in EconPapers)
Pages: 26
Date: 2014-01-13
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Citations: View citations in EconPapers (28)

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