TOKYO: Risks to Asia’s economy have increased with escalating trade tensions, China’s property sector woes and the potential for further market turbulence clouding the outlook, the International Monetary Fund (IMF) said on Friday (Nov 1).

Persistent downward price pressures from China can “provoke trade tensions” by hurting sectors in neighbouring countries with similar export structures, the IMF said, urging Beijing to take steps to achieve a more
demand-driven recovery for its economy.

“A longer and larger-than-expected slowdown in China would be harmful for both the region and the global economy,” the IMF said in its regional economic outlook report for Asia.

“China’s policy response is critical in this context,” it said, calling on the need for steps to facilitate property sector adjustment and strengthen private consumption.
In its latest forecast, the IMF expects Asia’s economy to expand 4.6 per cent in 2024 and 4.4 per cent in 2025 with looser monetary policy across the globe seen boosting private demand next year.

The projections for 2024 and 2025 were both revised up by 0.1 percentage point from the IMF’s forecasts made in April, but lower than the 5.0 per cent expansion in 2023.

Risks were “tilted to the downside” as past monetary tightening steps and geopolitical tensions could hurt global demand, increase trade costs and jolt markets,
the IMF said.

“An acute risk is the escalation in tit-for-tat retaliatory tariffs between major trading partners,” which would aggravate trade fragmentation and hurt growth in the region, it said.

The IMF said recent market turbulence could also foreshadow future bouts of volatility as markets price in additional, large interest rate cuts by the US Federal Reserve, and gradual rate hikes by the Bank of Japan.

“Sudden changes in expectations of these policy paths could cause exchange rates to adjust sharply, with spillovers into other financial market segments,” the report said.

“Although volatility by itself would not necessarily be harmful, it could undermine consumer confidence and
investment,” it said.

The IMF expects China’s economy to expand 4.8 per cent in 2024, up 0.2 point from its forecast in April but slower than last year’s 5.2 per cent increase. The country’s growth is expected to slow further to 4.5 per cent in 2025, the IMF said.

Source: Reuters/

Investors are bullish on Vietnam’s industrial property market growth on the back of the nation’s strategic location, sound infrastructure, and increasing demand for industrial space.

The market showed signs of recovery in the third quarter with increases in both supply of warehouse and rental prices in the south. Some 92,000 square meters of ready-built factories and 174,400 square meters of ready-built warehouses were launched, up 2% and 3%, respectively, from the previous quarter.

The net absorption of industrial land during July-September was 83 hectares, up 14.7% against Q2. Long An, Ba Ria – Vung Tau and Binh Duong provinces emerged as bright spots in investment as they lured various enterprises operating in different industries.

Knight Frank held that the development of new industrial parks is expected to enhance the South’s attractiveness to investors.

In the North, leasing prices for ready-built warehouses averaged 5 USD per square meters per month, up 0.6% quarter-on-quarter and 3.4% year-on-year, reflecting the growing demand for modern and high-standard industrial space.

Bac Ninh has been a hotspot for industrial property leasing, boasting a strategic location and robust infrastructure. The first phase of the Industrial Centre Yen Phong Expansion is under construction while KTG Industrial Yen Phong have lured tenants from various sectors.

In the meantime, BWID ESR Nam Dinh Vu industrial hub in Hai Phong city added more than 70,000 square meters of warehouses to the market.

It is positive to see continued construction of ready-built factories, enhancing investment choices when considering Vietnam a destination to start or expand operations. Landlords are competing with each other which invariably creates a good environment for occupants and encourages growth.

The range of products now available is significant and includes developments with environmental accreditation which brings Vietnam more in line with global supply chain requirements, said Alex Crane, Managing Director of Knight Frank Vietnam.

Source: Vnexpress