IMF Downgrades Asia's Economic Growth Forecast

IMF Downgrades Asia's Economic Growth Forecast

over 3 years ago1 min

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The International Monetary Fund (IMF) reckons the Asian economy will shrink by more than it thought this year, and it’s downgraded the region’s growth forecast 🌏

What does this mean?

The IMF – a major international economic organization – chopped Asia’s economic growth forecast for this year from negative 1.6% in June to negative 2.2%. That’s mostly down to places like India, Malaysia, and the Philippines, all of which are struggling to bounce back from the coronavirus outbreak. Adding insult to injury, the move actually bucks a global trend that last week saw the IMF upgrade the economic growth forecasts of… well, everywhere else.

Asia real GDP growth rates in percent | IMF
Asia real GDP growth rates in percent | IMF

Why should I care?

India may be included in that grim economic picture, but it was only earlier this month that Morgan Stanley was telling investors to go all in on the country’s stocks. They’ve been doing better than those of other emerging markets for the last six months, and the investment bank reckons that’s set to continue 🇮🇳 It puts that down to the Indian government’s improving economic policies, as well as to companies’ cost-cutting measures that should help them find their feet when things are under control. As for what’s hot and what’s not: Morgan Stanley’s backing consumer discretionary, industrial, and energy stocks, and recommends avoiding consumer staples and technology companies.

Asia might be dropping behind, but China’s still at the front of the pack: the IMF upgraded the country’s economic growth forecast for this year from 1% to 1.9% 📈 And it’s easy to see why: the Chinese economy is already back to where it was before the coronavirus lockdown brought the country to a standstill at the start of the year. It makes sense, then, that Asian investors seem pretty excited about its stock market’s prospects…

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