Growth Volatility Developing Asia: Evidence from the GARCH Model

This research examines GDP growth and its conditional volatility in developing Asia, as well as its subregions (East Asia, South Asia, Southeast Asia, Central Asia, and the Pacific) during 2017–2023. From the perspective of descriptive trend analysis and a GARCH(1,1) volatility framework, this paper examines how macroeconomic shocks affect growth stability. Findings suggest that economic volatility reached its highest level in 2020 due to the COVID-19 crisis and tends to fade away over time. Based on these GARCH estimates, there is strong persistence in volatility, indicating that shocks have a long-run impact on the regional economies. This indicates asymmetrical recovery trends in subregions, with East and South Asia returning to previous levels faster than the Pacific and Central Asia. The research finds that diversification, fiscal savings, and stronger regional cooperation are necessary to mitigate exposure related to external shocks. Policy impulses emphasize sustainable growth via innovation, digitalisation, and structural resilience. The paper also offers some directions for future research based on larger datasets and more sophisticated econometric analysis that would help to inform the non-linear country interaction of volatility. JEL Classification No: C22, E32, O11, O47, F43