Asia GDP growth stalls amid lack of China stimulus: IMF

Economic growth in Asia-Pacific will stall in 2020 in the worst slump for over 60 years, and the region should not expect to be bailed out by a major stimulus package from China, the IMF said.

Asian growth will fall to zero this year from 4.6pc in 2019 because of the impact of the Covid-19 pandemic, the IMF's Asia-Pacific director Changyong Rhee said today in a regional breakdown of the organisation's World Economic Outlook released earlier this week.

Asian growth will then rebound strongly to 7.6pc in 2021, led by "v-shaped" recoveries in China and India.

But China will be hard hit this year, with GDP growth falling to a forecast 1.2pc from 6.1pc in 2019. This is in sharp contrast to the global financial crisis, when China's growth held largely steady at 9.4pc in 2009 amid a huge fiscal stimulus. But a similar stimulus is unlikely this year and China will not help support Asian growth as it did then, Rhee said.

China is due to release its first-quarter GDP figures tomorrow, amid analysts' expectations that Beijing may report its first fall on record.

Asia-Pacific, which has been the major driver of global oil demand growth in recent years, still outperforms most other regions this year. Global GDP is expected to shrink by 3pc in 2020, in an economic decline that the IMF said is comparable to the Great Depression of the 1930s.

The oil demand decline in Asia's major economies is also set to be less pronounced than in Europe or the US, according to the latest forecasts from the IEA. Total oil product demand in China is likely to fall by 885,000 b/d, or 6.5pc, this year to around 12.7mn b/d, while demand in India will drop by 280,000 b/d or 5.6pc, the IEA said in its Oil Market Report yesterday.

This compares with a projected 9.3pc drop in global oil demand this year, with falls of 11.2pc and 15.6pc in the Americas and Europe respectively, the IEA said.

By Kevin Foster

source: Argus Media