SME Times is powered by   
Search News
Just in:   • Adani Group to invest Rs 57,575 crore in Odisha  • 'Dollar Distancing' finally happening? Time for India to pitch Rupee as credible alternative: SBI Ecowrap  • 49% Indian startups now from tier 2, 3 cities: Jitendra Singh  • 'India ranks 3rd in global startup ecosystem & number of unicorns'  • LinkedIn lays off entire global events marketing team: Report 
Last updated: 27 Sep, 2022  

World.Bank.9.Thmb.jpg World Bank downgrades growth for East Asia & Pacific

World.Bank.9.jpg
   Top Stories
» 49% Indian startups now from tier 2, 3 cities: Jitendra Singh
» 'India ranks 3rd in global startup ecosystem & number of unicorns'
» Tripura exported over 9K tonnes of pineapples in 2 years
» CPI inflation eases to 6.71% in July, IIP falls to 12.3%
» Rupee depreciates 12 paise to close at 79.64 against US dollar
IANS | 27 Sep, 2022
The World Bank has downgraded growth for developing East Asia and Pacific to 3.2 per cent in 2022.

The region's growth is projected to slow this year from 7.2 per cent in 2021, before accelerating to 4.6 per cent next year, according to the World Bank's newly released East Asia and Pacific Economic Update.

In April, the developing East Asia and Pacific countries is projected to grow by 5 per cent in 2022, reports Xinhua news agency.

The global economic slowdown is beginning to dampen demand for the region's exports of commodities and manufactured goods, the report noted.

Rising inflation abroad has provoked interest rate increases, which in turn have caused capital outflows and currency depreciations in some East Asia and Pacific countries, the report noted.

These developments have increased the burden of servicing debt and shrunk fiscal space, hurting countries that entered the pandemic with a high debt burden, according to the report.

"The Fed's response to higher inflation in the US in terms of faster than expected tightening of monetary policy and increases in interest rates, certainly putting pressure on all developing countries, including those in the region," World Bank East Asia and Pacific Chief Economist Aaditya Mattoo said at a virtual press conference in response to a question from Xinhua.

"We have seen capital outflows and those have contributed to depreciating exchange rates, and in order to try and support their currencies and also to deal with the slight increase in core inflation in the region, the region has had to tighten its interest rates," said Mattoo, adding that it has done so "less than most other parts of the world so far."

He noted that most of the developing countries in the region have switched their borrowing largely towards their domestic market, with smaller share of debt denominated in foreign currencies, which makes them less vulnerable.

"But that doesn't mean that they're immune to the consequences of higher interest rates, both in terms of the effect that they will have on economic activity, on investment, on consumption, as well as the potential financial strains, given that they're coming out of the pandemic with relatively high levels of both private and public debt.

"So I would say strains, yes. Serious instability, not yet," he said.

As countries of the region seek to shield households and firms from higher food and energy prices, current policy measures provide much-needed relief, but add to existing policy distortions, the report noted.

"Policymakers face a tough trade-off between tackling inflation and supporting economic recovery," said Mattoo.

"Controls and subsidies muddy price signals and hurt productivity. Better policies for food, fuel, and finance would spur growth and insure against inflation."

 
Print the Page
Add to Favorite
 
Share this on :
 

Please comment on this story:
 
Subject :
Message:
(Maximum 1500 characters)  Characters left 1500
Your name:
 

 
  Customs Exchange Rates
Currency Import Export
US Dollar
66.20
64.50
UK Pound
87.50
84.65
Euro
78.25
75.65
Japanese Yen 58.85 56.85
As on 13 Aug, 2022
  Daily Poll
PM Modi's recent US visit to redefine India-US bilateral relations
 Yes
 No
 Can't say
  Commented Stories
» GIC Re's revenue from obligatory cession threatened(1)
 
 
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter