HONG KONG (AP) — The International Monetary Fund trimmed its economic growth forecasts for Asia on Thursday because of financial turbulence in Europe and a possible slowdown in the U.S.The risks to Asia’s growth are “decidedly tilted to the downside” reflecting the negative outlooks for Europe and the U.S., which are the major markets for the region’s exports, the IMF said in a twice-yearly report.
Asia’s economic growth is forecast to average 6.3 per cent in 2011, rising to 6.7 per cent in 2012. That’s lower than the IMF’s April forecast of nearly 7 per cent in both years.
IMF officials warned that an escalation of the debt crisis affecting nations that use the euro, and a more severe slowdown in the United States, would hit Asia too.
Europe and the U.S. together still “constitute more than a third of trade in Asia, therefore any uncertainties … in advanced economies will have a significant effect on Asia,” said IMF Asia-Pacific Director Anoop Singh.
“Although domestic demand remains strong, we cannot assume Asia will be immune from risks if they materialise in the rest of the world,” said Singh.
Inflation is still strong in a number of Asian countries but the report said consumer prices are expected to ease after peaking this year as food and energy prices “gradually moderate.”