Asia braces for growth hit from Ukraine-driven inflation shock

An oil-driven inflation shock triggered by the war in Ukraine is forcing Asia’s policymakers to rethink their assumptions for 2022, with the risks of weak growth coupled with surging prices adding unwanted complexity to monetary setting plans.

Having largely lagged their Western counterparts in scrapping harsh pandemic restrictions, Asian economies, among the largest consumers of global commodities, now face the threat of crippling inflation.

For some central banks in the region, such as New Zealand, South Korea and Singapore, deep worries about prices and imported inflation have already set off aggressive policy tightening cycles. For most others, however, the need…