Asia faces ‘stagflationary’ economic outlook, says IMF

The International Monetary Fund (IMF) has warned that Asia is facing a “stagflationary” outlook due to significant uncertainty, with economic growth being lower than previously expected and inflation being higher. Anne-Marie Gulde-Wolf, acting director of the IMF’s Asia and Pacific Department, said that while Asia’s trade and financial exposures to Russia and Ukraine are limited, the region’s economies will be affected by the crisis through higher commodity prices and slower growth in European trading partners. In its latest forecast issued this month, the IMF said it expects Asia’s economy to expand 4.9% this year, down 0.5 percentage points from its previous projection made in January. Gulde-Wolf said that a further escalation in the war in Ukraine, new Covid-19 waves, a faster-than-expected Fed rate hike trajectory, and prolonged or more widespread lockdowns in China are among the risks to Asia’s growth outlook.