IMF warns energy shocks, cooling AI boom raise Asia-Pacific risks
The IMF forecasts Asia-Pacific growth of 4.8 per cent this year and 4.4 per cent in 2027, above April projections but below last year's 5 per cent. It warns that energy shocks from Middle East conflict, a possible AI boom slowdown and rising global bond yields could heighten downside risks for the r
The International Monetary Fund (IMF) has warned that energy shocks stemming from Middle East conflict, a possible cooling of the artificial-intelligence (AI) boom, and spillovers from rising global bond yields could intensify downside risks for Asia-Pacific economies.
In its latest regional economic outlook, the IMF forecast that the Asia-Pacific region would grow by 4.8 per cent this year, slowing to 4.4 per cent next year. Both figures are higher than the projections made in April but below last year's 5 per cent growth.
The IMF said the United States was expected to continue tightening monetary policy later this year, and that fiscal pressures facing most major advanced economies could ultimately keep pushing up asset yields in the Asia-Pacific region. Since the energy shock began this year, volatility in exchange rates and capital flows had increased, with emerging-market currencies facing depreciation pressure.
The fund noted that the AI boom had provided a boost to Asia's advanced economies, prompting it to raise their growth forecast to 3.2 per cent. For emerging economies viewed as the region's growth engines, the IMF lifted this year's growth projection to 5.1 per cent, down from 5.6 per cent last year, due to higher energy prices.