The IMF lowered its economic growth forecast for the Asia Pacific region in 2021 to 6.5%

The International Monetary Fund (IMF) released the 19 Asia Pacific Economic Outlook report on 2021. It is estimated that the Asian Pacific region's economic growth in 2021 will be 6.5%, which is 1.1 percentage points lower than the April forecast.

The report shows that the decline in regional economic growth is mainly affected by the deterioration of growth prospects in emerging markets and low-income countries, especially India and ASEAN countries. After a sharp contraction last year, India's economy is expected to grow by 9.5% this year, 3 percentage points lower than the forecast in April. The overall growth forecast of developed economies is basically the same as before, the growth expectations of South Korea and New Zealand are raised, and the growth expectations of Japan and Australia are lowered.

IMF Asia Pacific director Li Changyong said at a remote media conference on the same day, the main downside risk of Asian economy is still COVID-19's uncertainty. In addition, the continuous interruption of the global supply chain, the weakening of the participation in the global value chain, the increasing financial vulnerability of some enterprises and industries, and the possible spillover effect of the tightening of monetary policy by the United States pose important risks to the economy of the Asian region.

In response to a Xinhua reporter's question, Li Changyong said that if the supply chain bottleneck faced by the United States causes sustained inflation and rising interest rates, it may lead to capital outflow, currency devaluation and rising financing costs in Asia, which will have a negative impact on Asia's recovery.

Source: Xinhuanet