China financial slowdown to pull on Asia development: IMF

The International Monetary Fund on Friday said China's economic slowdown is expected to drag on growth across Asia through the end of next year.

Worldwide economic prospects have dimmed this year as countries have faced higher living costs, tighter financial conditions and increased uncertainty following Russia's military offensive in Ukraine.

The crises have dulled the rebound from the Covid-19 pandemic, even as Asia has remained a "relative bright spot" compared with other parts of the globe, the IMF said in its Regional Economic Outlook.

But growth in the region faces headwinds from a Chinese economy weighed by the pandemic and a sluggish property sector, the organisation said.

"With a growing number of property developers defaulting on their debt over the past year, the sector's access to market financing has become increasingly challenging," the report said.

"Risks to the banking system from the real estate sector are rising because of substantial exposure."

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The new report also downgrades the growth forecast for Asia to 4 percent this year, down 0.9 percentage points from a previous outlook in April.

"As the effects of the pandemic wane, the region faces new headwinds from global financial tightening and an expected slowdown of external demand," the report said.

Earlier this month, the IMF announced it had cut its growth forecast for China to 3.2 percent in 2022.

Official data on Monday showed China's economy grew 3.9 percent year-on-year in the third quarter, a stronger-than-expected performance. (AFP/Reuters)

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