The Development Bank cut its 2022 growth forecast for East Asia and the Pacific (EAP) to 5% from 5.4% and warned that growth could fall to 4% if conditions worsen further, trapping another 6 million people in poverty.
The World Bank said higher US rates are likely to trigger capital outflows from developing countries and put pressure on their currencies, causing “premature” fiscal tightening and hurting growth.
“Specific shocks to economic activity in China are also likely to affect the EaP countries, whose trade is increasingly oriented towards Chinese markets,” the bank said in a statement. said.
The organization added that the turmoil caused by the war in Ukraine could affect the region “most specifically” due to interruptions in the supply of goods and increased financial stress.
“War and sanctions are likely to drive up global food and fuel prices, hurting consumers and growth,” the report said, adding that the number of poor people in the Philippines, for example, could increase by 1.1 million. if cereal prices rise by 10% over the previous year. year.