IMF Cuts China Growth Forecast, Citing Real Estate Weakness; Sees Asia Slowing after 2023 Rebound

IMF downgraded its 2023 and 2024 growth forecasts for China, citing property sector weakness. It expects China's GDP growth to be 5% in 2023 and 4.2% in 2024.

Prolonged housing market correction in China could trigger financial stress for developers and asset quality deterioration. This could reduce China's GDP up to 1.6% below baseline by 2025.

Asia Pacific growth outlook brighter for 2023 at 4.6%, but expected to slow to 4.2% in 2024 and 3.9% medium-term.

Asia leading disinflation globally, expected to return to central bank targets by end 2023.

Asia central banks should avoid premature policy easing. Financial supervision important given strains from tight monetary policy.