On January 12, 2022, workers worked at the construction site of the Mumbai Coastal Highway Project.
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The International Monetary Fund on Tuesday raised its forecast for Asia’s economic growth in 2024, remaining optimistic about India’s economic growth and focusing on the need for more stimulus measures in China.
The International Monetary Fund currently expects Asia’s economy to grow by 4.5% this year, up 0.3 percentage points from six months ago. Its forecast for 2025 remained unchanged at 4.3%.
“The outlook for the Asia-Pacific region in 2024 is already bright: we now expect economic growth in the region as inflationary pressures continue to dissipate,” wrote Krishna Srinivasan, IMF Asia and Pacific director. will be lower than our previous expectations.
The IMF said the upward revision reflected an upgrade on China, where policy stimulus was expected to provide support.
It also said India was “the fastest growing major economy in the world” and “public investment remains an important driver”. India is currently the world’s fifth largest economy, with a GDP of US$3.7 trillion, and aims to become the world’s third largest economy by 2027.
The International Monetary Fund’s Srinivasan also wrote that strong private consumption will continue to drive growth in other emerging markets in Asia.
The International Monetary Fund believes that despite strong demand growth, monetary tightening, lower commodity prices and easing supply chain disruptions have led to lower inflation in Asia.
Alleviating China’s real estate crisis
The International Monetary Fund said the biggest risk facing the Asian economy is the long-term adjustment of China’s real estate industry. This would weaken demand and increase the likelihood of long-term deflation, thereby increasing the likelihood of hitting other economies through “direct trade spillovers.”
“This means that China’s policy response is important for itself and the entire region,” Srinivasan wrote in his blog.
The International Monetary Fund said China needs a set of policies to “accelerate the exit of non-viable property developers, facilitate the completion of housing projects, and manage local government debt risks”. The report noted that China’s fiscal stimulus measures in October and March helped mitigate the impact of declining manufacturing activity and a downturn in the service industry.
Earlier this year, the International Monetary Fund said it expected Asia’s largest economy to It will grow by 4.6% in 2024.
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