IMF Raises Asia Growth Forecast for 2024 on Optimism over India, China Stimulus

The International Monetary Fund (IMF) has increased its growth projection for Asia in 2024, citing optimism about India’s growth trajectory and calling for more stimulus from China. The IMF now anticipates a 4.5% growth for Asia’s economy this year, up by 0.3 percentage points compared to six months ago, with a consistent forecast of 4.3% for 2025.

Krishna Srinivasan, the IMF’s Director of Asia and Pacific, mentioned that the region’s economic outlook has improved due to easing inflation pressures and projected policy stimulus in China contributing to the revision. India was highlighted as the fastest-growing major economy globally, with public investment playing a crucial role in its growth momentum.

The IMF emphasized the significance of strong private consumption in propelling growth in Asia’s emerging markets while attributing lower inflation levels in the region to monetary tightening, decreased commodity prices, and alleviation of supply-chain disruptions despite heightened demand growth.

However, the challenging scenario of an extended downturn in China’s property market was identified as the primary risk to Asia’s economic stability. The IMF stressed the importance of China’s policy response in managing this risk, advocating for measures that address debt risks, expedite the exit of nonviable property developers, and foster housing project completion to mitigate the potential adverse consequences on the broader region.

In earlier reports, the IMF had projected a 4.6% growth rate for China in 2024, prior to the release of data showing the country’s economy expanded by 5.2% in the preceding year, aligning with the official target. China’s recent fiscal stimulus initiatives were acknowledged for alleviating the impacts of declining manufacturing activity and sluggish services on its economy.