Economic risks in Asia are rising due to escalating trade tensions, issues in China's real estate sector, and potential market volatility, the International Monetary Fund (IMF) warned in its report.

According to the report, the persistent downward pressure on prices from China could trigger trade tensions since it would harm neighboring countries with similar export structures.

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The IMF urged China to drive a demand-led economic recovery, and noted that a longer-than-expected slowdown in China's economy would damage both regional and global economies, making China's policy response crucial.

The IMF raised its 2024-2025 economic growth forecasts for Asia by 0.1 ppt to 4.6% and 4.4% respectively, lower than last year's 5% growth. It also lifted its 2024 economic growth forecast for China by 0.2 ppts to 4.8%, below last year's 5.2%, with further slowdown expected to 4.5% next year.