IMF: Mainland Will Grow, HK To Contract This Year

Some of Asia's biggest economies are likely to narrowly avoid recession this year and are poised to bounce back strongly in 2021 if the coronavirus is contained, the IMF forecast on Tuesday, with the mainland leading the recovery.

However, more advanced economies in the region – Hong Kong, Japan, South Korea, Australia and Singapore – will dip into recession, according to the forecast.

The pandemic has hammered the world economy, with millions of jobs lost and businesses shut because of unprecedented lockdown measures to slow the spread of the disease.

But unlike the United States and major Western nations, China – the world's second-largest economy – will scrape through 2020 without going into recession, the IMF said in its latest World Economic Outlook.

It predicted growth of 1.2 per cent growth for China this year, the slowest expansion in more than four decades.

"Emerging Asia is projected to be the only region with a positive growth rate in 2020 (1.0 per cent), albeit more than five percentage points below its average in the previous decade," the IMF said.

"Other regions are projected to experience severe slowdowns or outright contracts in economic activity."

The Fund forecast China to bounce back next year with 9.2 per cent.

India, Asia's third-biggest economy, is also expected to grow at 1.9 per cent in 2020 before surging 7.4 per cent next year.

China is expected to lead the economic recovery in Asia, and Beijing has unveiled a number of massive stimulus measures.

But economists have warned that the Beijing government's domestic measures like increased credit will have a limited effect as long as the rest of the world is in turmoil, analysts said.

"Beyond China's own domestic challenges, the global recession poses additional threat to the economy," Chang Shu and David Qu of Bloomberg Economics said in a note. (AFP)