Recession Risk is Emerging on Some Asian Economies, According to a Survey

According to a Bloomberg’s survey conducted last month, some economies in Asia will face the risk of recession as growing prices have forced central banks to increase interest rates. The survey has also predicted a downturn in Sir Lanka in the next financial year. According to the survey, Sri Lanka has an 85 percent probability of falling into recession in 2023, up from a 33 percent chance in the past survey.

The Asian Development Bank (ABD) cut its economic growth forecast for developing Asia and the Pacific to 4.6 percent in 2022 due to China’s slowing growth, more aggressive monetary tightening in the economics, and the fallout from Russia’s continued invasion of Ukraine.

The ADB also raised its forecast for inflation on the continent of Asia, amid higher prices for fuel and food. According to ADB, the development of Asia and the Pacific is continuing its recovery from the COVID-19 pandemic. Many countries in Asia are easing mobility restrictions, which is strengthening economic activity.

However, growth has slowed in China, which is the largest economy in Asia, because of disruption from new COVID-19 lockdowns as well as weak demand across the globe.

Albert Park, chief executive of ADB, said the economic impact of the COVID-19 pandemic has declined across most of Asia, but they are far from a sustainable and full recovery. He added that it is very crucial to address all these global uncertainties, which continue to pose risks to the recovery of Asia.