26 Apr 2022
IMF Slashes Asia’s Growth Outlook after Cautioning against ‘Stagflationary’ Hazards
The Index Today
The International Monetary Fund (IMF) on Tuesday cautioned against risks of stagflation in Asia, stemming from China’s economic slump, the Ukraine-Russia crisis, and the resulting spike in commodity costs.
According to the IMF’s acting Director of Asia and Pacific Department, Anne-Marie Gulde-Wolf, despite the ongoing Ukraine-Russia conflict having little direct impact on the economic progress of Asia, the resulting increase in commodity prices and decelerating growth among European trade partners, exacerbated by the economic stagnation in China due to the country’s current COVID-19 surge.
This comes as the IMF projected Asia’s economy to grow by 4.9% in 2022 in its newest forecast, having fallen by 0.5 percentage points made during its January forecast, reported Reuters.
Gulde-Wolf noted at a virtual news conference in Washington, “Therefore, the region faces a stagflationary outlook, with growth being lower than previously expected, and inflation being higher." She added, "Monetary tightening will be needed in most countries, with the speed of tightening depending on domestic inflation developments and external pressures."