The war between Russia and Ukraine is likely to add “a major blow” to the global economy, although its impact on the Asian region is likely to be limitedthe International Monetary Fund (IMF) said in a message posted on its website on Tuesday.
Key comments
“The conflict is a severe blow to the world economy that will hurt growth and push up prices“.
“We wait lower the Fund’s previous forecast of 4.4% global economic growth in 2022″.
In Asia and the Pacific, specifically, the spillover effects from the Russian invasion of Ukraine are “probably limited given the lack of close economic ties, but slower growth in Europe and the global economy will have a strong impact on major exporters”.
“In Asia, the impact will be felt mainly by oil importers of the Association of Southeast Asian Nations, India and some Pacific Islands.”
“Countries with direct trade, tourism and financial exposures would feel increasing pressure.”
“An increased risk of unrest in some regions, from sub-Saharan Africa and Latin America to the Caucasus and Central Asia.”
“War can fundamentally alter the global economic and geopolitical order as energy trade changes, supply chains reconfigure, payment networks fragment, and countries rethink reserve currency holdings.”
Source: Fx Street
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