IMF cuts Asia's growth forecast and warns of sell-off

The International Monetary Fund (IMF) has cut Asia's growth forecast for this year and next, and said it fears Europe's debt crisis may trigger a sell-off in Asian assets.

The IMF added subdued growth in the US will also increase the prospect of capital outflows from the region as investors look to moderate risk. It has cut its growth forecast from 7% for this year and next, to 6.3% this year and 6.7% in 2012. "An escalation of euro area financial turbulence and a renewed slowdown in the US could have severe macroeconomic and financial spillovers to Asia," said the IMF. "Since 2009 investors from advanced economies have built up substantial positions in Asian markets. "A sudden liquidation of these positions could trigger a loss of confidence, and...