As storm clouds gather amid supply chain worries and the potential for a new wave of COVID-19 infections, the International Monetary Fund is reining in its economic growth forecast for Asia.
According to The Economic Times, the IMF is cutting the forecast for the region to 6.5%, 1.1% less than a forecast issued in April.
“Although Asia and Pacific remains the fastest growing region in the world, the divergence between Asian advanced economies and emerging market and developing economies is deepening,” the publication noted, citing the report.
According to The Economic Times, the ASEAN nations, which include Thailand, Singapore, the Philippines, Malaysia and Indonesia, all face plenty of hurdles amid new variants of the coronavirus and potential supply chain issues.
"Over the coming months, new infection waves remain the biggest concern,” the IMF said in its report, according to the publication.
The IMF is expecting China’s economy to grow by 8% this year and 5.6% in 2022, but that growth will not be balanced, according to India Times. Moreover, the U.S. Federal Reserve could take actions that would have a ripple effect on the economies of China and other Asian nations, according to Reuters.
Reuters reported that the IMF report expressed concerns that while Asia and the Pacific region continues to grow at a rapid pace, that could be thwarted by shifts in policy that drive borrowing costs higher for some emerging economies in the region.
The publication also noted that the IMF indicated the gap between advanced economies in the region and developing economies continues to grow.