Asia's growth prospects remain solid

China's economic reform process will benefit from solid growth in the Asian region. According to our latest Regional Economic Outlook Update (October 2014), Asia's near-term growth prospects remain solid even as other world regions slip slightly.

Despite a mild slowdown earlier this year, Asian economies are expected to grow at 5.5 percent in 2014 and 2015, broadly in line with the pace of the last couple of years. Downside risks have increased, but so has resilience. This includes countries most affected by the heightened volatility following the adverse market reaction to taper talk surrounding the US Federal Reserve last year. Yet further action is needed to strengthen policy buffers and address medium-term challenges to stability and growth. And inflation should remain benign across most of the region.

So, what is driving Asia's solid growth outlook? First, stronger global growth should help propel exports across most of the Asia and Pacific region. In fact, after a weak first quarter, export growth is gathering steam, and with the strengthening of growth in the United States and expected recovery in the eurozone, this momentum should remain relatively strong.