Macroeconomic Volatility and Forecasting Growth in Developing Asia: An EViews GARCH - EGARCH Approach

This paper uses descriptive analysis and econometric modeling on the relationship between growth, inflation, and macroeconomic volatility in Developing Asia from 2017 to 2023 by utilizing Generalized Autoregressive Conditional Heteroskedasticity (GARCH) and Exponential GARCH (EGARCH) estimation frameworks of EViews. Using annual panel data taken from the Asian Development Outlook (ADB, 2023) and the World Bank, the study investigates the conditional volatility of GDP growth, inflation, and current account behavior in major sub-regions—East Asia, South Asia, Southeast Asia, Central Asia, and the Pacific. The empirical findings show that the growth path of developing Asia is robust but exhibits high volatility clustering, especially during the 2020 pandemic shock. The GARCH(1, 1) model reveals that the degree of persistence in output volatility is very high, implying that economic growth uncertainty tends to be sustained at a high level after large shocks. In the meantime, EGARCH(1,1) estimates suggest considerable asymmetry; negative shocks (such as an increase in commodity price pass-throughs, currency pressures, global demand slowdown, etc.) generate higher excess volatility compared with positive shocks. These results also hint at the fact that the macroeconomic conditions of the region are characterized by structural weaknesses and instances of enhanced susceptibility to negative external developments. Policy implications emphasise the need to bolster fiscal resilience, implement credible and forward-looking monetary policies, and improve regional financial coordination toward mitigating fluctuations while supporting growth. They highlight that the long-term success of Asia will not just be determined by its rate of growth, but by its ability to manage and anticipate volatility through proactive macroeconomic management. By using GARCH–EGARCH analysis combined with regional data patterns, our paper provides new insights into the twin objectives of high growth and stability in developing Asian economies. JEL Classification:C22,E31,E32, F43,O47,O53