This year, the International Monetary Fund raised its growth prediction for Asia, signaling a potential upward adjustment in its view for China and reflecting a more optimistic prognosis for the two biggest countries in the area.

The IMF study on Tuesday predicts that Asia will grow by 4.5 percent in 2024 compared to the previous year, which is a decrease from the 5 percent growth rate of the previous year but 0.3 percentage points better than the October regional estimate.

The most recent statistics has taken into consideration China's growth rate and the revised estimate for India released earlier this month, which was based on hopes that government intervention will accelerate development. According to the IMF, China's first-quarter GDP exceeded forecasts due to strong exports and strong industrial demand, which might lead to another upward adjustment.

The director of the IMF's Asia and Pacific section, Krishna Srinivasan, stated in a blog post that "risks to the near-term outlook are now broadly balanced" due to the likelihood of a soft landing and global disinflation.

China's central government has increased expenditure this year in an effort to boost growth to its goal of about 5% while helping an economy still suffering from a damaged real estate market.For the third consecutive year, the Indian government increased capital investment by a third in 2024.

The IMF predicted that India's real gross domestic product would increase by 6.8% this year while China's real gross domestic product would grow by 4.6 percent in 2024. The regional prognosis for 2025 was maintained by officials at a 4.3% advance.

There are still a few hazards, the IMF stated. The most significant of them is a protracted decline in China's real estate market, which would reduce demand and exacerbate deflation. Growing budget deficits and trade-related issues resulting from US-China tensions are further challenges.

Additionally, officials cautioned Asian countries of basing their own monetary policy decisions unduly on predictions for the direction taken by the Federal Reserve. In response to its currency being severely damaged by the surging US dollar, Indonesia unexpectedly increased interest rates this month. The largest economy in Southeast Asia is one of many in the area dealing with currency depreciation as hopes of early Fed rate reduction fade.