Ukraine war to slow economic growth and drive up poverty in Asia, World Bank warns
Russia’s invasion of Ukraine has further dampened the economic prospects for developing countries in east Asia and the Pacific, meaning lower economic growth and higher poverty in the region this year, the World Bank has warned.
The Ukraine factor came on top of the existing risks that the region – home to 2.1 billion people and stretching from China to Papua New Guinea — has been facing in recent years. They included the ongoing Covid-19 pandemic, the financial tightening in the United States, and the pandemic resurgence amid China’s zero Covid policies.
China, which accounts for 86% of regional output, is forecast to expand 5% in 2022, 0.4 of a percentage point less than the World Bank’s October estimate. But in the Bank’s downside scenario, the world’s second-largest economy could grow at just 4%.
The report covers the economies of 23 developing countries in the East Asia and Pacific region but not those of developed countries such as Australia, New Zealand, Singapore or Japan.
Even before the war in Ukraine, Beijing had been tackling Covid shocks to its economy and dealing with existing vulnerabilities in its real estate sector.
In last month’s annual political gatherings, China’s ruling Communist party set its GDP growth target at “around 5.5%” this year. In recent weeks, however, as the war in Ukraine continued to rage and Omicron led the country’s biggest city, Shanghai, to lock down, economists have expressed concerns.
In its latest regional economic update, entitled Braving the Storms, the World Bank said that while commodity producers and fiscally prudent countries may be better equipped to weather external shocks, the repercussions of recent events will dampen the growth prospects of most in the region, which is
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