13 Apr 2022 10:08 am
It is not only the Ukraine crisis that is shaking the global financial system and slowing down growth in Asia. Current US monetary policy and China’s flagging economy are also factors, the World Bank said in a new report.
Sanctions on Russia and the crisis in Ukraine will slow Asia’s economy this year as they disrupt supplies of commodities, increase financial pressures and weaken global confidence, according to the World Bank.
Other factors include “US financial strains and China’s structural slowdown,” writes the institution in the latest East Asia and the Pacific Economic Update released last week.
While the region’s direct dependence on goods, services and capital from Russia and Ukraine is limited, global increases in food and fuel prices are hampering consumer behavior and economic growth.
Meanwhile, the World Bank has lowered its forecast for economic growth in the region this year from 5.4 percent to 5 percent and a worst-case scenario to 4 percent. Last year, the region saw 7.2 percent growth as economies began to recover from the pandemic.
According to the World Bank, other factors hampering the recovery and economic growth in the Asia-Pacific region are the US interest rate policy to curb inflation and slower-than-expected economic growth in China.
However, the World Bank pointed out that there are still opportunities for growth in the areas of trade, digital technology and green production.
More on the subject – This is how drastic sanctions against Russia can have an impact on the global economy