The International Monetary Fund (IMF) has increased its growth forecast for Asia in 2024, citing India's growth and China's stimulus measures as the main drivers.

• The International Monetary Fund (IMF) has revised its projection for Asia's economic growth this year to 4.5%, representing a 0.3 percentage point increase compared to its previous forecast six months ago.
• IMF calls India "the world's fastest-growing major economy."
• While it was stated that the largest threat to Asia's economy is a prolonged downturn in China's real estate market.

On Tuesday, the International Monetary Fund increased its forecast for Asia's growth in 2024, emphasizing the importance of additional stimulus from China, particularly in light of India's strong economic performance.

The IMF has revised its prediction for Asia's economic growth in 2021 to 4.5%, an increase of 0.3 percentage points from its previous forecast. Meanwhile, its projection for 2025 remains unchanged at 4.3%.

According to Krishna Srinivasan, director of Asia and Pacific at the IMF, the outlook for the region's economy in 2024 has improved, with inflation pressures continuing to decrease.

The International Monetary Fund (IMF) stated that China's upward revision reflects policy stimulus, which will provide support.

India, the world's fifth-largest economy with a GDP of $3.7 trillion, is striving to become the third-largest economy by 2027, with public investment remaining a crucial factor in its growth.

In addition to what was stated by the IMF's Srinivasan, it is predicted that robust private consumption will remain a key driver of growth in the emerging markets of Asia, excluding China.

Despite high demand growth in Asia, lower inflation can be attributed to monetary tightening, lower commodity prices, and subsiding supply-chain disruptions.

Mitigating China's property crisis

The biggest risk for Asia's economy is a prolonged correction in China's property sector, which could weaken demand and increase the chances of prolonged deflation, leading to direct trade spillovers.

According to Srinivasan's blog post, China's policy response is significant not only for itself but also for the entire region.

The IMF recommended a policy package to speed up the departure of unprofitable property developers, encourage the completion of housing projects, and control the debt risks of local governments. The organization pointed out that China's fiscal stimulus in October and March helped alleviate the impact of declining manufacturing activity and slow services.

The IMF predicted that China's economy would grow 4.6% in 2024 earlier this year. However, this projection was made before data was released showing that China's economy actually grew by 5.2% last year, which is higher than the official target of around 5%.