SINGAPORE, April 29 (UPI) -- Asia's economy, aided by robust domestic demand, is forecast to grow at 5.75 percent this year, the International Monetary Fund said Monday.
In its regional economic outlook report, released in Singapore, the IMF said:
"This pickup in growth, after a year of subdued economic performance, is driven largely by continued robust domestic demand. Consumption and private investment will be supported by favorable labor market conditions, with unemployment at multiyear lows in several economies."
The growth will be aided by a rapid increase in credit, particularly in China, and some ASEAN economies, and the rebound of capital inflows since the latter half of 2012, the report said.
ASEAN is the 10-member Association of the Southeast Asian Nations.
Demand in China and Japan's stimulus measures to pull the country out of its chronic deflation were also seen as favorable factors.
On the risk side, the report said that while the threat of severe economic fallout from a European crisis has diminished, regional issues that need to be watched include buildup of financial imbalances and rising asset prices.
Other risks could be an unexpected slowdown in China, weaker-than-expected effects from continuing stimulus in Japan or trade disruptions from a natural disaster or geopolitical tensions.
"Policymakers in the region face a delicate balancing act in the near term: guarding against the potential buildup of financial imbalances while delivering appropriate support for growth," the report said.