IMF to revise down Asia and Pacific growth forecast amid mounting COVID-19 fallout
The International Monetary Fund is expected to revise down the growth forecast for the Asia and Pacific region in a revised update to its World Economic Outlook later this month, a senior IMF official said on Tuesday.
"First quarter GDP growth turns mostly on the downside, with high-frequency indicators for April and May point to severe disruptions in the second quarter. China appears to be the main exception," IMF First Deputy Managing Director Geoffrey Okamoto told reporters at a virtual roundtable.
"Some countries also have had difficulty containing the pandemic spread, which has implications for their own economic outlook," said Okamoto, whose appointment as the multilateral lender's second-highest ranking official took effect in March.
Noting that the IMF is going to release an update to the WEO on June 24, Okamoto said that "we expect to revise down materially reflecting the mainly longer-than-expected lockdowns and increasingly negative global trade spillovers, partially offset by large stimulus in several countries."
In the latest WEO report released in April, the IMF projected growth in Asia to stall at zero percent in 2020 due to the COVID-19 pandemic, the lowest growth since the 1960s. China is expected to see moderate growth of 1.2 percent, according to the report.
In response to a question from Xinhua, the IMF first deputy managing director said at the roundtable that one thing China benefited from was "very clear, decisive action early on" to contain the spread of coronavirus within its country, and also "acting very quickly to put in place the policy support measures that would allow things to stabilize."
Noting that China is in the cycle a little bit earlier than other countries, Okamoto said that "we hope more countries end up in this category as time goes on," meaning that they could follow a path toward seeing growth on an "upward trend" in a few months.
"Obviously we're still in the thick of this, and in many areas, there are economies that are just starting to reopen as we speak. And some of them haven't yet. So it's too early to judge for many of them," Okamoto said.
Changyong Rhee, director of the IMF's Asia and Pacific Department, who also joined the roundtable, said as China implemented and started to ease lockdown policy a lot earlier, China's first quarter performance was in line with IMF expectation, but for many other Asian economies, the first quarter numbers were worse than expected.
For the second quarter, Rhee said that China also "cannot be immune from" the global trade slowdown, while noting that China's economy seems to "turn around" in general, even though at a low level.