World Bank Slashes East Asia’s GDP Prediction for 2022 over Ukraine Crisis

The World Bank has reduced its 2022 financial forecast for East Asia and the Pacific (EAP) region on account of ongoing geopolitical tensions between Ukraine and Russia and the resulting economic impacts it has had on the zones.

According to Reuters, the bank stated in a report on Tuesday that its prediction for economic growth in the EAP region has dropped by 0.4% to 5% since its previous 5.4% forecast in October. However, the World Bank also warned of a grimmer outlook if conditions in Ukraine and Russia take a turn for the worse which could stall growth by 4% spurred by delayed legislative action.

Manuela Ferro, the World Bank Vice President for EAP said in a statement, "Just as the economies of East Asia and the Pacific were recovering from the pandemic-induced shock, the war in Ukraine is weighing on growth momentum." She added, "The region's largely strong fundamentals and sound policies should help it weather these storms."

World Bank East Asia and Pacific Chief Economist Aaditya Mattoo contended that the Ukraine-Russia crisis poses the "most serious risk" so far to the EAP region’s economic progress, especially since the war has resulted in an increase in commodity costs and an unstable fiscal prospect.

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