IMF revises up its Asia’s growth forecast, warns of China risk

TOKYO: The International Monetary Fund (IMF) on Tuesday projected emerging Asian economies would expand 5.2 per cent this year, slowing from 2023 but revised up from its forecast three months ago on stronger-than-expected growth in China, Reuters reported.

The region’s growth forecast for 2024, which compared with a 5.4 per cent expansion last year, was upgraded 0.4 percentage point from October.

In 2025, emerging and developing Asia is expected to grow 4.8 per cent, the International Monetary Fund said in its upgraded World Economic Outlook.

China’s growth estimate for this year was revised up by 0.4 percentage point to 4.6 per cent on increased government spending, though it was still slower than last year’s 5.2 per cent expansion.

But it also warned of the risk that China’s growth could underwhelm expectations if authorities resort to “unintended fiscal tightening” that could hurt consumption.

“Absent a comprehensive restructuring policy package for the troubled property sector, real estate investment could drop more than expected, and for longer, with negative implications for domestic growth and trading partners,” the IMF said.

Growth in India is projected to remain strong at 6.5 per cent in both 2024 and 2025, with an upgrade from October by 0.2 percentage point for both years, on resilient domestic demand, it said.

Among advanced economies, Japan’s growth is expected to slow to 0.9 per cent in 2024 from last year’s 1.9 per cent, as the effect of pent-up demand after the removal of pandemic-related curbs fades, the IMF said.