Covid

IMF Official Sounds Warning on Risks to Asian Economies

 

The International Monetary Fund (IMF) warned Asian economies on Friday they face serious risks as they attempt to steer a path between supporting growth with more stimulus and tightening credit to stabilise debt and inflation.

IMF deputy managing director Kenji Okamura said the Covid-19 pandemic, the war in Ukraine and tougher global financial conditions would make this year “challenging” for Asia.

The risks applied particularly to the most vulnerable economies, Okamura said.

The war was affecting Asia through higher commodity prices and slower growth in Europe, he said.

 

ALSO SEE: Japan Consumer Prices Soar at Fastest Pace in Seven Years

 

 

‘Drifting Inflation Expectations’

Speaking at his first media event since becoming one of four deputy managing directors at the global lender in December, Okamura warned on the prospect of even more forceful tightening if inflation expectations kept on “drifting”.

“There is a risk that drifting inflation expectations could require an even more forceful tightening,” he said, calling for calibrated policies and clear communication.

Okamura, a former Japanese vice finance minister for international affairs, said the Bank of Japan’s easing policy – which the IMF has described as effective – runs counter to a global shift towards monetary tightening.

The widening gap between Japanese and US interest rates has been a major factor behind the recent yen depreciation to two-decade lows.

“You can mostly explain the recent movements, especially the last month, in the yen based on essentially tighter global monetary policy” including the US Federal Reserve, said Ranil Salgado, chief of the IMF mission in Japan.

“The yen depreciation on balance helps Japan,” Salgado added.

 

  • Reuters, with additional editing by George Russell

 

 

READ MORE:

Pakistan Seeks Urgent $6bn IMF Bailout as Economy Flounders

IMF Boosts Yuan, Dollar Weightings in SDR Basket, Trims Euro

Sri Lanka Talks to China on Debt Rejig After IMF Meetings

 

 

 

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

Recent Posts

FTX Crypto Fraudster Bankman-Fried Jailed For 25 Years

A US District Judge said the former billionaire wunderkid was responsible for one of the…

14 hours ago

China’s Big 5 Lenders Warn of Property Risks as Margins Shrink

Banks have been reluctant to deepen their exposure to the ailing real estate sector but…

15 hours ago

Chinese Biotech Giant WuXi ‘Sent US Client’s Data to Beijing’

US intelligence officials say Chinese pharma companies are risking national security at a time when…

19 hours ago

China’s BYD Delays EV Factory; Solid-State Batteries ‘Unsafe’

BYD has set back plans for an EV factory in Vietnam, while CATL has said…

19 hours ago

Yellen: China’s Green Energy Push a Threat to Global Jobs – AP

US Treasury Secretary Janet Yellen has accused China of ‘distorting prices’ with its increased green…

20 hours ago

Yen Fears Drag on Nikkei, Hang Seng Lifted by Policy Bets

Japan’s plunging currency and the threat of BoJ intervention sent Tokyo’s soaraway benchmark downwards

21 hours ago