The International Monetary Fund (IMF) cut this year’s economic growth forecast for Asia and warned of a fresh wave of coronavirus infections, supply chain risks and inflation pressures showing downside risks to the outlook report.

China’s economy will increase by 8.0 per cent this year and 5.6 per cent by the following year. Still, the recovery is unstable due to coronavirus pandemic and economic strengthening weighing on damage, IMF said. “Any false policy information by the US Federal Reserve can trigger significant capital outflow and increase in borrowing prices for Asian economies, the IMF added.

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The IMF cut t2021’s economic growth forecast for Asia to 6.5 per cent, declining by 1.1 percentage points from April. The IMF boosted its Asia growth forecast for 2022 to 5.7 per cent. “Even though Asia and Pacific continue to be the fastest-growing area in the world, the difference between Asian advanced economies and rising market and developing economies is increasing,” the report said. India is assumed to grow 9.5 per cent this year. At the same time, other economies like Australia, South Korea, New Zealand and Taiwan will benefit from high-tech and commodity booms, the IMF announced.