The International Monetary Fund (IMF) Managing Director Kristalina Georgieva sees Asia’s economic outlook at risk from inflationary pressure and the slowdown of China’s economy.
Masatsugu Asakawa, a president of Asian Development Bank, also encouraged Asia’s policymakers to be aware of any immediate capital outflows driven by a series of interest rate hikes from the U.S. central bank.
Despite her concerns on Asia’s economy, Georgieva said the Association of Southeast Asian Nations (ASEAN) economies are a bright spot in the global economy with 5% growth this year and slightly moderate in 2023.
She also warned that the economic outlook is exceptionally uncertain and dominated by risks, pressured by the raging war between Russia and Ukraine, tightening financial policy from global banks and economic slowdown in China.
The Managing Director of IMF said that another pressing global challenge is inflation. It is expected to average only 4% in Asia this year. But inflationary pressures in the region are rising.
“We don’t know how long this shock will last and whether other shocks may come. But we need to rebuild and preserve buffers and be prepared to fully use our policy tool-kit,” Georgieva said.