ADB trims Asia growth forecast
The Asian Development Bank trimmed its 2022 growth forecast for developing Asia Wednesday as "increasing" price pressures after Russia's invasion of Ukraine threaten a recovery from Omicron surges.
Inflation across the vast region stretching from the Cook Islands in the Pacific to Kazakhstan in Central Asia was expected to gather pace as countries bounced back from the pandemic, and energy and food costs rose, it said.
In the wake of the Omicron-driven surge in coronavirus infections and the conflict in Ukraine, the Philippines-based lender lowered its 2022 economic growth forecast to 5.2 per cent.
That compares with its previous prediction in December of 5.3 per cent and the 6.9 per cent growth chalked up last year.
While the bank was optimistic the region would continue to rebound from Covid-19, chief economist Albert Park said the recovery would be "uneven" and there were "significant downside risks".
"What is certain is that the fallout from the war is an additional hurdle for economies in developing Asia which are still contending with the pandemic," Park said.
While the Caucasus and Central Asia would take a direct hit from the Ukraine crisis due to their close trade and financial links to Russia, the rest of the region would be affected indirectly through higher food and energy prices.
"Energy bills will rise for energy importers, pushing inflation up and weighing on demand," the bank said in its flagship Asian Development Outlook report.