IMF cuts Asia growth forecast, warns of supply chain risks

The International Monetary Fund (IMF) cut Asia’s economic growth forecasts for this year, warning that a new wave of COVID-19 virus infections, supply chain disruptions and inflationary pressures pose downside risks. .

The Chinese economy will grow 8% this year and 5.6% in 2022, but the recovery is still “unbalanced”As repeated coronavirus outbreaks and fiscal restriction weigh on consumption, he said.

Any “untimely standardization of policies or flawed political communications“By the US Federal Reserve could also trigger a major capital outflow and increased borrowing costs for emerging Asian economies, the IMF said.

In its regional outlook report, the IMF cut the Asian economic growth forecast for this year to 6.5%, down 1.1 percentage points from the projection made in April, as the rebound in cases of the Delta variant affected the consumption and production of the factories.

The IMF it raised its Asia growth forecast for 2022 to 5.7% from the 5.3% estimate made in April, reflecting advances in vaccination.

“Although Asia and the Pacific remains the fastest growing region in the world, the divergence between advanced Asian economies and emerging market and developing economies is deepening”The report said.

Risks are tilted to the downside, primarily due to uncertainty about the pandemic, supply chain disruptions and the possible effects of the normalization of US monetary policy.

The Chinese economy posted its slowest growth rate in a year in the third quarter, underscoring the challenge policymakers face in trying to shore up a faltering recovery while holding back the real estate sector.

India is expected to grow 9.5% this year, while advanced economies such as Australia, South Korea, New Zealand and Taiwan benefit from the boom in high-tech and raw materials, according to the IMF.

“In the coming months, new waves of infections remain the biggest concern”Said the IMF.