IMF Raises Asia Growth Forecast for 2024: India and China Driving Economic Expansion

The International Monetary Fund (IMF) has revised its growth forecast for Asia in 2024, painting a more positive picture fueled by strong performance in India and increased stimulus measures in China.

According to the IMF, Asia’s economy is now expected to grow by 4.5% this year, up by 0.3 percentage points from earlier projections. This upward revision reflects optimism about India’s growth trajectory and the anticipated impact of policy stimulus in China.

India, in particular, has been highlighted as the world’s fastest-growing major economy by the IMF. The country’s robust public investment continues to be a key driver of economic expansion. With a current GDP of $3.7 trillion, India aims to climb to the third position globally by 2027.

Krishna Srinivasan, director of Asia and Pacific at the IMF, emphasized that strong private consumption will also contribute significantly to growth in other emerging markets across Asia.

Despite rising demand, inflation pressures are expected to ease in Asia due to factors such as monetary tightening, lower commodity prices, and improved supply-chain stability.

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However, the IMF warned that Asia’s economic outlook is not without risks, citing China’s ongoing property sector issues as a potential threat. A prolonged correction in China’s property market could dampen demand and increase the risk of deflation, impacting economies across the region through trade spillovers.

To address these challenges, the IMF stressed the importance of China’s policy response. It recommended measures to accelerate the restructuring of nonviable property developers, facilitate the completion of housing projects, and manage local government debt risks.

China’s recent fiscal stimulus efforts have already shown some positive effects, mitigating the impact of declining manufacturing and sluggish services sectors.

Looking ahead, the IMF expects Asia’s largest economy, China, to achieve a growth rate of 4.6% in 2024. This outlook underscores the importance of proactive policies in sustaining economic stability and fostering growth not only within China but also across the broader Asian region.

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In summary, the IMF’s revised forecast for Asia in 2024 reflects a cautiously optimistic outlook, with India and China playing pivotal roles in driving economic expansion amidst ongoing challenges and risks.