IMF: Asian economy affected by geopolitical changes

An IMF official revealed Asia’s confrontation with the biggest possible repercussions of rising geopolitical tensions, especially after China conducted military exercises around Taiwan.

Krishna Srinivasan, Director of Asia-Pacific Management at the International Monetary Fund (IMF), told the US agency Bloomberg that “the risks of geographical dispersion have risen very sharply over the past five years, exacerbated by the war in Ukraine. If these risks escalate, Asia faces the greatest risk of loss among all regions of the world.
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China’s response to Taiwan President Tsai Ing-wen’s meeting with U.S. Speaker Kevin McCarthy during her visit to the United States last month again highlighted the possibility that Taiwan, the self-governing democracy over which Beijing declares sovereignty, could become an international point of tension.

However, Asia is one of the bright spots for the global economy, with the IMF expecting the region’s economy to grow 4.6% this year, up 0.3 percentage points from its October 2022 forecast, according to the World Economic Outlook. The financial institution raised its forecast for the growth rate of the region’s economy after China reopened its economy following Beijing’s cancellation of its harsh “zero COVID” policy.

The Asian economy was affected by a slowdown in Asian exports to the United States and Europe, but China could help recover from the effects of the slowdown.