Asia’s Economies Face Weakening Growth amid Rising Inflation Pressures

The global economic outlook has darkened, and growth across Asia and the Pacific is poised to slow further amid the continuing impact of Russia’s invasion of Ukraine and other shocks.

Economic growth in Asia and the Pacific is projected to decelerate to 4.2 percent this year, 0.7 percentage points less than we forecasted in April and slower than the 6.5 percent growth in 2021. We lowered our 2023 forecast to 4.6 percent, down by 0.5 percentage points.

Risks that we highlighted in our April forecast—including tightening financial conditions associated with rising central bank interest rates in the United States and commodity prices surging because of the war in Ukraine—are materializing. That in turn is compounding the regional growth spillovers from China’s slowdown.

China slowdown deepens

China, Asia’s largest economy, saw a significant deceleration in the second…