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IMF Raises Asia Growth Outlook in 2024, focusing on China, India

The latest IMF forecast for Asian economic growth in 2024 is driven by China and India while navigating potential risks and monetary policy challenges.

IMF Raises Asia Growth Outlook in 2024, focusing on China, India

IMF Raises Asia Growth Outlook in 2024, focusing on China, India

The International Monetary Fund (IMF) has become more optimistic about economic growth in Asia this year. According to their Asia growth forecast, the region will expand by 4.5%, which is slightly higher than what they previously thought. However, it's a bit slower compared to last year's growth of 5%.

This positive outlook is mainly due to improvements in the economies of China and India, the two biggest players in the region. China's economy performed better than expected in the first quarter of the year, thanks to strong exports and demand for manufactured goods. Because of this, the IMF might raise its growth forecast for China even more.

The Chinese government has been spending more money to support its economy, especially since the property market has been struggling. Similarly, India has increased its capital spending for the third consecutive year to boost growth. Comparison of IMF forecasts for China and India reflects the driving forces behind the region's economic growth.

According to the IMF forecast for Asia's economic growth in 2024, China's economy is expected to grow by 4.6% this year, while India's is forecasted to grow by 6.8%. However, there are still risks that could affect this positive outlook. One major concern is the ongoing downturn in China's property sector, which could reduce demand and cause deflation. Additionally, there are worries about increasing fiscal deficits and tensions between the United States and China, which could impact trade in the region.

The IMF also warned Asian countries about relying too much on the actions of the US Federal Reserve when making their own monetary policy decisions. For example, Indonesia recently raised interest rates unexpectedly to stabilise its currency, which was struggling against the strengthening US dollar. While it's important to consider the Fed's actions, following them too closely could lead to instability in inflation expectations.

Vineela Sekhar
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