IMF warns Asia faces ‘stagflationary’ economic outlook

  div classBodysc17zpet90 cdBBJodivpBy Leika Kiharap

  pTOKYO Reuters The Asian region faces a “stagflationary” outlook amid significant uncertainty with economic growth being lower than previously expected and inflation being higher, a senior International Monetary Fund IMF official said on Tuesday.pdivdivdiv classBodysc17zpet90 cdBBJodiv

  pWhile Asia‘s trade and financial exposures to Russia and Ukraine are limited, the region’s economies will be affected by the crisis through higher commodity prices and slower growth in European trading partners, said AnneMarie GuldeWolf, acting director of the IMFs Asia and Pacific Department.p

  p“These headwinds to growth come at a time when policy space to respond is limited,” GuldeWolf told a news conference, adding that Asian policymakers will face a difficult tradeoff of responding to slowing growth and rising inflation.p

  p“Monetary tightening will be needed in most countries, with the speed of tightening depending on domestic inflation developments and external pressures,” she said.p

  pThe U.S. Federal Reserve‘s expected steady interest rate hikes also presents a challenge to Asian policymakers given the region’s huge dollardenominated debt, GuldeWolf said.p

  pIn its latest forecast issued this month, the IMF said it expects Asias economy to expand 4.9 this year, down 0.5 percentage points from its previous projection made in January.p

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