Beautiful Virgin Islands

Tuesday, Jun 24, 2025

IMF raises Asia’s economic forecast on China recovery, warns of risks 

IMF raises Asia’s economic forecast on China recovery, warns of risks 

The International Monetary Fund raised Asia’s economic forecast on Tuesday as China’s recovery underpinned growth, but warned of risks from persistent inflation and global market volatility driven by Western banking sector woes.
The reopening of China’s economy will be pivotal for the region with the spillover to Asia seen focused on consumption and service-sector demand rather than investment, the IMF said.

“Asia and Pacific will be the most dynamic of the world’s major regions in 2023, predominantly driven by the buoyant outlook for China and India,” the IMF said its regional economic outlook report.

“As in the rest of the world, domestic demand is expected to remain the largest growth driver across Asia in 2023.”

Asia’s economy is expected to expand 4.6 percent this year after a 3.8 percent increase in 2022, contributing around 70 percent of global growth, the IMF said, upgrading its forecast by 0.3 of a percentage point from October.

China and India will be key drivers with an expansion of 5.2 percent and 5.9 percent, respectively, though growth in the rest of Asia is also expected to bottom out this year, the report said.

But the IMF cut next year’s Asian growth forecast by 0.2 of a point to 4.4 percent, and warned of risks to the outlook such as stickier-than-expected inflation, slowing global demand as well as the impact of US and European banking-sector stress.

“While spillovers to the region from stress in the US and European financial sectors have been relatively contained thus far, Asia remains vulnerable to tightening financial conditions and to sudden and disorderly repricing of assets,” the IMF said.

And while Asia has strong capital and liquidity buffers to fend off market shocks, the region’s highly leveraged corporate and household sectors are “significantly” more exposed to a sharp increase in borrowing costs, it added.

The IMF also urged central banks in Asia — excluding Japan and China — to keep monetary policy tight to bring down inflation, which could remain stubbornly high due in part to robust domestic demand.

“The costs of failing to bring inflation below target are likely to outweigh any benefits from keeping monetary conditions loose,” the IMF said.

“Insufficient tightening in the short term would require disproportionately more monetary tightening later to avoid high inflation becoming ingrained, making a larger contraction more likely.”

While China will be a key driver of the region’s growth, the country’s property sector remains a risk that policymakers need to address to ensure an even recovery in the sector, the IMF said.

Recent moves by the government to ease financing to developers had largely benefited bigger developers. Still, regions in China with smaller, weaker players had yet to show signs of a recovery, said Thomas Helbling, deputy director of the Asia and Pacific Department at the IMF.

“While the government’s (recent) effort has stabilized the market, it should proactively support the restructuring of weaker developers which are still suffering,” said Helbling at a media briefing in Hong Kong.

China’s policymakers have been trying to stabilize the sector that accounts for a quarter of the national gross domestic product after a string of defaults among developers and a slump in home sales.

“For regions with weaker housing markets, the recovery has yet taken place. We need further policy measures to limit potential risks,” said Helbling.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
BBC Demands Perplexity AI Immediately Stop Using Its Content
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
×