The Asia-Pacific region will contribute to major global economic growth, International Monetary Fund's (IMF) latest report on Asia-Pacific Economic Outlook showed on Thursday, meanwhile, Asia's dynamism will be driven primarily by the recovery in China and resilient growth in India.

In its latest Asia-Pacific Economic Outlook report, the IMF predicted that economic growth in the Asia-Pacific region will rebound to 4.6 percent this year from 3.8 percent last year. This will contribute about 67.4 percent to global growth, while China and India are expected to contribute more than half of global growth in 2023, with China contributing about 34.9 percent and India 15.4 percent.

China's gross domestic product surged to 4.5 percent in the first quarter, while many countries still face slowing growth.

In the first quarter, China's service sector experienced an accelerated recovery, according to National Bureau of Statistics (NBS) official economic data. The value added of services rose 5.4 percent from the same period in Q1 2022, 3.1 percentage points higher over that in the fourth quarter of 2022.

"Normally, the strongest spillover from China would be from its demand for investment goods, but this time the biggest spillover is from demand for consumption", said Krishna Srinivasan, director of the Asia and Pacific Department of the IMF.

The IMF reckoned that in the short term, China needs a strong macro-policy to maintain the current economic recovery momentum, while implementing a neutral fiscal policy by avoiding its premature tightening.

Meanwhile, the IMF suggested that the Chinese economy re-balances towards consumption in the medium and long term, shifting the growth away from investment growth.

In addition, the IMF believed Asian banks are well-capitalized and have shown resilience in the aftermath of the recent financial turmoil in the U.S. and Europe, which means the spillovers from bank failures in the U.S. and Europe have a limited impact on the Asia-Pacific region.

The IMF also expressed its concerns about the slow growth in the U.S. and Europe, citing weak external demand as an important risk factor to the Asia-Pacific region in the short term, which could continue until 2024.

The U.S. debt ceiling impasse could have strong spillover effects across the Asia-Pacific region, said IMF. Meanwhile, the uncertainty around Japanese monetary policy, as well as, an increase in the government bond yields could also lead to global spillovers.