SINGAPORE, Oct 29 (NNN-XINHUA) – The International Monetary Fund (IMF), said in a report released yesterday that, economic growth in the Asia and Pacific region is expected to slow down in 2022 and 2023.
This reflects headwinds from several aspects, including global financial tightening and the Russia-Ukraine conflict, according to the report.
Asia’s strong economic rebound early this year is losing momentum, with a weaker-than-expected second quarter, said the IMF.
It cut growth forecasts for Asia and the Pacific to four percent this year, and 4.3 percent next year, down by 0.9 and 0.8 percentage points, respectively, compared to the Apr forecasts.
The levels in Apr’s outlook were well below the 5.5 percent average, over the last two decades.
However, Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, believed that “Asia remains a relative bright spot in an increasingly dimming global economy.”
The report said, the U.S. Federal Reserve has become much more aggressive, in tightening its monetary policy as the U.S. inflation remains stubbornly high. This translated into tighter financial conditions for Asia.
Most, but not all, countries in Asia have seen a deterioration of their terms of trade, and this has been an important factor behind currency depreciations, so far this year, it said.
Srinivasan said that, for policymakers, further tightening of monetary policy will be required, to ensure that inflation returns to target and inflation expectations remain well anchored.
He also suggested that fiscal consolidation is needed, to stabilise public debt and support the monetary policy stance.– NNN-XINHUA