IMF Working Papers

Potential Growth in Emerging Asia

Author/Editor:

Rahul Anand ; Kevin C Cheng ; Sidra Rehman ; Longmei Zhang

Publication Date:

January 13, 2014

Electronic Access:

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Summary:

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.

Series:

Working Paper No. 2014/002

Subject:

Aging Capital accumulation Inflation Labor Labor force participation National accounts Population and demographics Prices Production Total factor productivity