A 'sharp and uncharacteristic' economic slowdown in China will stall growth in Asia by the end of next year, dampening an already bleak global outlook, the IMF warned.

The global economic outlook deteriorated this year as countries faced higher costs of living, tighter financial conditions and increased uncertainty after the war in Ukraine, AFP reported.

Asia remained a relatively bright spot compared to other parts of the globe, according to the IMF's Regional Economic Outlook. But growth in the region has been hampered by the Chinese economy, weighed down by a tough zero Covid policy and a crisis in the real estate sector, the IMF said.

Earlier this month, the IMF lowered its growth forecast for China to 3.2 percent in 2022, the smallest growth for the world's second-largest economy in about four decades, not counting the first year of the pandemic.

The new report lowered the growth forecast for Asia this year to four percent, down 0.9 percentage points from the previous forecast in April.

The IMF expects China to grow to 4.4 percent and Asia to grow to 4.3 percent next year, still well below the average of about 5.5 percent over the past two decades.

The IMF estimates that the widespread slowdown in China has serious implications for the rest of Asia through trade and financial linkages.

It notes that the region may also face other persistent headwinds in the form of tightening global monetary policy and the war in Ukraine, which has led to a surge in commodity prices.

Asia's strong economic recovery earlier this year is losing momentum as the second quarter was weaker than expected, said Krishna Srinivasan, director of the IMF's Asia and Pacific Department.

He said many countries need to take steps to reduce looming corporate debt and human capital losses, which much of the lack of growth can be attributed to lower levels of investment after the pandemic. He warned that economic fragmentation caused by geopolitical tensions and trade policy uncertainties represents a significant risk for the region and could have adverse macroeconomic consequences in the short term.

China is the last major economy committed to a zero Covid policy, imposing surprise lockdowns, mandatory testing, and lengthy quarantines to quell any outbreaks as they occur.

Japan's Nomura Bank estimates that some 208 million people in the country are under some form of enhanced restrictions because of the virus.