They involve Russia, Ukraine, China, and the US
© Getty Images / Suphachai Lonuchit / EyeEm
Sanctions on Russia and the crisis in Ukraine will slow economies in Asia this year, the World Bank has warned. Other factors include “financial tightening in the US, and structural slowdown in China,” the institution wrote in the latest East Asia and the Pacific Economic Update, published last week.
The crisis in Ukraine and the subsequent sanctions on Russia could affect the Asia-Pacific region by disrupting the supply of commodities, increasing financial stress and reducing global confidence, the World Bank said.
The region’s direct dependence on Russia and Ukraine through imports and exports of goods, services, and capital is limited, it adds, but consumers and economic growth will be affected by the worldwide increase in food and fuel costs.
The region’s economic growth forecast for this year has been slashed from 5.4% to 5%, and in a low case scenario, to 4%, the World Bank said. Last year, the region saw a rebound to 7.2% growth as the economies started to recover after the pandemic.
The US monetary policy of sharply increasing interest rates in an attempt to curb inflation and slower than expected economic growth in China are among the other shocks hampering recovery and economic growth in the Asia-Pacific region, according to the World Bank.
The institution pointed out, however, that there are still some growth opportunities in the fields of trade, digital technology, and green manufacturing.
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