The International Monetary Fund (IMF) said today that Asian countries, like the rest of the world, are being hit by countermeasures such as the war in Ukraine, which not only increases prices but also hinders growth.
The regional outlook, issued following the World Economic Outlook was released last week, showed Asia’s growth forecast fell to 4.9 percent, as a slowdown in mainland China spilled over to other closely linked economies.
“The region faces stagnant inflation with lower growth than previously expected and higher inflation,” said Anne-Marie Gulde-Wolf, acting director of the IMF’s Asia-Pacific department.
Inflation this year is now expected to rise to 3.2 percent, a full 1 percentage point higher than expected in January, Good Wolf said. “Despite the downward revision in growth, Asia is still the most dynamic region in the world and an important source of global growth.”
But Russia’s invasion of Ukraine and Western sanctions on Moscow have pushed up global food and fuel prices, and major central banks have raised interest rates to fight inflation, putting pressure on debt-ridden countries.
Good Wolf points out that regional performance varies, depending on countries’ reliance on imported energy and their relationship with mainland China. For example, the growth of Pacific island countries has slowed down sharply, while Australia has risen slightly.
The International Monetary Fund said governments will have to respond forcefully, starting with subsidizing poor households most affected by rising prices.
(Editor-in-Chief: Zhuang Yanyu)
