The International Monetary Fund (IMF) has adjusted its growth forecast for developing Asian economies in 2024, showing a more positive outlook for countries like India. However, it’s also sounding the alarm about potential risks stemming from China’s ongoing property sector troubles.
In its latest assessment, the IMF predicts that emerging economies in Asia will see a growth rate of 5.2% in 2024, a slight uptick from its previous forecast in October. Despite this upgrade, growth for the year is still expected to be slightly cooler compared to the estimated 5.4% growth in 2023.
China’s economic growth projection for 2024 has been revised upward to 4.6%, thanks to stronger-than-expected growth in the previous year and increased government spending to address natural disasters. However, the IMF is exercising caution regarding China’s deepening property crisis, warning that it could lead to growth setbacks.
The IMF stresses the importance of implementing comprehensive restructuring policies to address the challenges in China’s property market. Prolonged issues in this sector could have negative implications for both domestic and global growth.
Despite these challenges, the IMF suggests that China could experience a stronger recovery if effective reforms are implemented in the property sector or if substantial fiscal support is provided to boost consumer confidence and demand.
Meanwhile, India’s growth outlook remains robust, with the IMF projecting a growth rate of 6.5% for both 2024 and 2025, driven by resilient domestic demand.
Overall, the IMF has revised its global growth forecast upward, citing the strong performance of the U.S. economy and fiscal support measures in China. It anticipates global growth of 3.1% in 2024, followed by a 3.2% expansion in 2025.
However, the IMF also foresees higher inflation rates, with global inflation projected to reach 5.8% in 2024. While inflation is expected to ease in developed economies, it is projected to remain elevated for emerging economies in 2024.
