The International Monetary Fund (IMF) on Tuesday revised down its 2021 growth forecast for the Asian economy to 6.5 percent, down by 1.1 percentage points from its April projection, according to its newly released regional economic outlook. 

"Risks are tilted to the downside, mainly because of uncertain pandemic dynamics, vaccine efficacy against virus variants, supply chain disruptions, and potential global financial spillovers from the U.S. monetary normalization," the IMF said. 

Any "untimely policy normalization or misconstrued policy communications" by the U.S. Federal Reserve could also trigger significant capital outflow and higher borrowing costs for Asian emerging economies, it explained. 

The IMF said the Asia-Pacific remains the fastest-growing region in the world and pointed to a deepening divergence between advanced economies and emerging market and developing economies in Asia. 

It raised its Asia growth forecast for 2022 to 5.7 percent from an estimate of 5.3 percent in April, reflecting progress in vaccinations. 

China's economy will grow by 8 percent in 2021 and 5.6 percent in 2022, according to the IMF. "But the recovery remains unbalanced because private consumption continues to lag amid repeated outbreaks and significant fiscal policy tightening," it said in the report. 

Growth prospects for Japan have been downgraded to 2.4 percent after a disappointing second quarter and state-of-emergency extensions. Meanwhile, India is expected to expand 9.5 percent this year after a sharp decline last year, according to the IMF. 

Advanced economies like Australia, South Korea and New Zealand benefit from high-tech and commodity booms, while other emerging market and developing economies, notably the ASEAN countries, still face severe challenges from a resurgent virus and weakness in contact-intensive sectors, the IMF said. 

(With input from agencies)