World Economic outlook - IFM forecast asian economic growth 2013 : The International Monetary Fund said that Asia will continue to power the world economy, but it warned there was an increasing risk that growth in the region could drop to levels last seen during the global financial crisis.
In an update to its regional economic outlook, the IMF said it saw a one in seven chance of Asian growth falling below 4% in 2013, compared to its main forecast for the region's economy to expand 5.9% next year.
In an update to its regional economic outlook, the IMF said it saw a one in seven chance of Asian growth falling below 4% in 2013, compared to its main forecast for the region's economy to expand 5.9% next year.
The fund said that risks to its core view--which assumes that euro zone-related tensions gradually diminish and U.S. lawmakers prevent severe fiscal tightening measures automatically kicking in around the turn of the year--remained substantial and were on the downside. However, it noted that growth could be stronger than expected if officials in Europe and the U.S. were to fully deliver on their commitments.
"Growth is projected to pick up very gradually, and Asia should remain the global growth leader, expanding over two percentage points faster than the world average next year," the IMF said. But it noted that the euro-zone debt crisis in particular posed a considerable risk.
If a shock from Europe or the U.S. were to spark a severe global slowdown, that would exert a "powerful" drag on Asia's most open economies via trade, the IMF said. And while Asian countries have been resilient to financial market spillovers, an aggressive pullback by European banks and capital flight could cause severe disruption, particularly to Southeast and East Asian economies with the exception of China, it said.
The IMF now forecasts Asia's economy to grow 5.4% this year, 0.6 of a percentage point weaker than the view it published in April. Its new 2013 forecast is also 0.7 of a point below its April estimate.
The fund added that a hard landing in China's economy remained a low-probability risk, but warned that such a scenario would have a significant impact on Asian economies, if it did occur
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