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IMF slashes this year's economic forecast for Asia
Oct-22-2020

The International Monetary Fund (IMF) in its report on the Asia-Pacific region has slashed this year's economic forecast for Asia, reflecting a sharper-than-expected contraction in countries like India, a sign the coronavirus pandemic continues to take a heavy toll on the region. While the IMF upgraded next year's growth forecast, it warned the recovery will be sluggish and patchy with countries dependent on tourism seen taking a particularly hard hit.

It said fear of infection and social distancing measures are dimming consumer confidence and will keep economic activity below capacity until a vaccine is developed.  The IMF said it expects Asia's economy to contract 2.2% this year. That decline is 0.6 of a percentage point larger than its forecast in June, due to sharp slumps in countries like India, the Philippines and Malaysia. India's economy is likely to shrink 10.3% this year in stark contrast to China, which is set to expand 1.9%.

It said Asia's economy is likely to grow 6.9% in 2021 thanks to the boost from expected stronger recoveries in China, the United States and the euro area. China's recovery can boost regional trade, weak global growth, closed borders, and festering tensions around trade, technology, and security have worsened the prospects for a trade-led recovery in the region.

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