IMF cuts Asia-Pacific economic growth forecast to 6.5% in 2021
The International Monetary Fund (IMF) released the Asia-Pacific Economic Outlook Report on the 19th, saying that due to factors such as the new crown epidemic, the Asia-Pacific economy is expected to grow by 6.5% in 2021, down 1.1 percentage points from the April forecast.
The report shows that the downward revision of economic growth in the region is mainly affected by the deterioration of the growth prospects of emerging markets and low-income countries, especially India and ASEAN countries. India's economy is expected to grow 9.5 percent this year after shrinking sharply last year, down 3 percentage points from its April forecast. The overall growth forecast for developed economies is basically the same as before, with the growth forecasts for South Korea and New Zealand raised, and the growth forecasts for Japan and Australia lowered.
Li Changyong, director of the Asia-Pacific Department of the IMF, said at a remote media conference that day that the main downside risk to the Asian economy is still the uncertainty of the new crown epidemic. In addition, the continued disruption of global supply chains, weakened participation in global value chains, heightened financial vulnerabilities of some companies and industries, and possible spillover effects from tighter U.S. monetary policy pose important risks to the Asian regional economy.
When answering a question from a reporter from Xinhua News Agency, Li Changyong said that if the supply chain bottleneck faced by the United States causes inflation to continue and interest rates to rise, it may lead to capital outflows, currency depreciation and rising financing costs in the Asian region, which will have a negative impact on Asia's recovery.