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IMF warns of inflation “ghost” slowing growth in Asia

People shop at a supermarket in China. (Photo: Xinhua)

This is the opinion of Ms. Anne-Marie Gulde-Wolf, Acting Regional Director Asia – Pacific by the International Monetary Fund (IMF).

Inflation in Asia is expected to rise to 3.2% this year, higher than the forecast made in January.

The growth outlook for Asia was downgraded to 4.9%, in part because slowing growth in China has spilled over into other economies.

Each country in the region has different economic growth prospects, depending on their dependence on imported fuels and their economic relationship with China.

The IMF also recommended that monetary policy tightening should be implemented in most countries, with the tightening speed depending on domestic inflation and external pressures.

However, the IMF also said that, despite the lower growth forecast, Asia remains the world’s most dynamic region and an important driver of global growth.

In addition, the IMF official said that Russia’s deployment of a special military operation in Ukraine and Western sanctions against Moscow, has pushed up food and fuel prices around the world. , while central banks have to raise interest rates to curb inflation, which puts pressure on countries with high debt levels.

According to Ms. Anne-Marie Gulde-Wolf, now is a difficult time for policymakers to deal with pressures on growth and deal with high inflation and these “headwinds” can could make the damage from the COVID-19 pandemic even greater.

Ms. Gulde-Wolf said that the economic outlook of countries in Asia is not the same, depending on the degree of dependence on imported energy and economic relationship with China, and therefore the economic growth of the island nations. The Pacific Ocean declines sharply, while Australia may see slight growth.

Therefore, governments need to react more strongly, initiating targeted relief for poor families, which have been hit hardest by higher prices.

IMF cuts global economic growth IMF cuts global economic growth – Global economic growth will decelerate both this year and 2023, while inflation will continue to be high, due to the impact of the conflict in Ukraine.

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