ADB Cuts Forecasts for Asian Economy This Year Due to Impact of Ukraine War

The Asian Development Bank (ADB) lowered its forecast for developing Asian economies, including China and India, to 5.2% this year from a previous estimate of 5.3%. This is a significant drop from 6.9% in 2021, with the ADB stating that the Russia-Ukraine war is likely to affect the recovery of Asian economies.

The ADB has published its report on Asia’s economic outlook. It states that the war between Russia and Ukraine will further aggravate Asian economies already affected by the COVID-19 pandemic. Other factors likely to affect Asia’s economic outlook this year include rising commodity prices, financial instability that could be threatened by the U.S. Federal Reserve’s accelerated rate hikes, and new varieties of the COVID-19 pandemic.

The ADB projects that China’s economy will grow by only 5% this year, a sharp decline from 8.1% in 2021 due to the COVID-19 pandemic. It has a strong impact on economic activity and consumer spending in China.

The ADB also raised its inflation forecast for developing Asia to 3.7% this year from 2.7% previously, and inflation is expected to reach 3.1% next year.

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