The International Monetary Fund projected on Tuesday that the Asia and Pacific region will grow by 4.5 percent this year, revising upward its October forecast of 4.2 percent, mainly due to strong investment in China and India.
China's economy is expected to grow 4.6 percent, up 0.4 percentage point from the previous forecast, the IMF said. It projected India's growth to be 6.8 percent, up 0.5 point.
The latest growth outlook for the region was "better than previously projected," Krishna Srinivasan, Director of the IMF's Asia and Pacific Department, told reporters in Singapore, noting it was a slowdown from the estimate of 5 percent in 2023.
However, the IMF's Regional Economic Outlook for Asia and Pacific showed that growth next year will moderate to 4.3 percent, with the projected slowdown in China's growth a key factor.
"China is a source of both upside and downside risks," Krishna said, pointing to Chinese policies aimed at addressing stresses in the property sector and those contributing to the country's excess industrial capacity as factors potentially impacting the region.
The outlook report also warned that "the risk of geopolitical frictions is especially high in the current environment of political uncertainty, with many countries around the globe holding elections in 2024."
As for Japan, the IMF said in the report that the country's exit from its negative interest rate policy "has proceeded smoothly thus far, easing previous concerns about spillovers from sudden repricing."
