NEW YORK — Growth projections for China’s economy for both 2023 and 2024 were downgraded by the International Monetary Fund as the country’s real estate crisis as well as weakened consumer and business confidence pose “significant risks” for a global economy that has otherwise proved surprisingly resilient.

“The likelihood of a hard landing has receded, but the balance of risks to global growth remains tilted to the downside. China’s property sector crisis could deepen, with global spillovers, particularly for commodity exporters,” the IMF wrote in the fall edition of its biannual World Economic Outlook.

The outlook projects China’s economy will grow 5% this year and 4.2% in 2024, a cut of 0.1 and 0.2 percentage points, respectively, from a previous forecast in July.

“Commodity exporters and countries that are part of the Asian industrial supply chain are the most exposed to China’s loss of momentum,” the report said.

India is seen continuing to lead all major economies growing at 6.3% this year — a 0.2 percentage point upward revision reflecting better-than-expected consumption earlier in the year — and 6.3% again in 2024.

The so-called ASEAN-5 — consisting of Indonesia, Malaysia, the Philippines, Singapore, and Thailand — saw a 0.4% percentage point downgrade to 4.2% growth this year, before growing at 4.5% in 2024.

Despite this, emerging and developing markets in Asia are still expected to grow faster than any other region, at 5.2% in 2023 and 4.8% in 2024.

Japan’s growth is projected at 2% this year, an uptick of 0.6 percentage points buoyed by pent-up demand and a return of tourism, as well as rebounding auto exports, before cooling to 1% growth in 2024.

While the global growth forecast is its lowest in decades at just 3% this year and 2.9% in 2024 — well below the 3.8% average in the two decades prior to the pandemic — the world’s economy has proved resilient coming out of the pandemic and weathering the worst shocks of Russia’s war in Ukraine.

“In retrospect, the resilience has been remarkable,” wrote IMF Chief Economist Pierre-Olivier Gourinchas in a release accompanying the report.

Headline inflation has come down dramatically amidst historic monetary tightening, from 9.2% in 2022 to 5.9% this year, and a projected 4.8% in 2024.

The likelihood of a soft landing in which inflation is brought down while avoiding a recession has increased, particularly in the U.S., where strong investment and consumption have boosted the growth forecast to 2.1% for this year and 1.5% in 2024, an increase of 0.3 and 0.5 percentage points, respectively. The 2023 U.S. gross domestic product is expected to exceed it’s pre-pandemic path.

However, “the global economy is limping along, not sprinting,” Gourinchas said.

Moreover, the resilience and growth have been slow and uneven, reflecting an increasingly divergent pathway for growth with some regions far below pre-pandemic projections. The slowdown is most pronounced in advanced economies, except for the U.S., and in the eurozone in particular, along with the U.K. and Canada.

Conversely, China’s growth headwinds remain the exception in growth forecasts for emerging and developing markets.

However, in the medium term, growth prospects for emerging and developing economies are weak.

“The implications are profound: a much slower convergence toward the living standards of advanced economies, reduced fiscal space, increased debt vulnerabilities and exposure to shocks, and diminished opportunities to overcome the scarring from the pandemic and the war,” Gourinchas wrote.

While the most extreme risks like fears of a banking crisis in April have moderated, the IMF believes the overall balance remains tilted to the downside, with China’s real estate crisis looming as the biggest threat.

“China’s real-estate crisis could intensify, posing a complex policy challenge. Restoring confidence requires promptly restructuring struggling property developers, preserving financial stability, and addressing the strains in local public finance,” Gourinchas wrote.

Additionally, geopolitical fragmentation and climate shocks have increased commodity pricing volatility. The report also comes just days after the escalating conflict between Israel and the Gaza Strip.

“All countries should aim to limit geoeconomic fragmentation that prevents joint progress toward common goals” Gourinchas wrote in the report’s foreword. “And instead work toward restoring trust in rules-based multilateral frameworks that enhance transparency and policy certainty and help foster a shared global prosperity.”