New Delhi: Asia deepening integration into global trade networks has left the region particularly vulnerable to recent shocks from business policy, especially from US reciprocal tariffs, said Krishna Srinivasan, director of the Asian-Tichoral department in the International Monetary Fund.
Srinivasan spoke on a press briefing of the economic outlook for Asia and the Pacific on the outskirts of the Spring Meeting of the IMF/World Bank in Washington and noted that Asia was significantly more exposed and faced more potential shock than other regions. “The uncertainty has also increased significantly, and the short -term outlook for the region has deteriorated,” he added.
In the commentary on India’s recent performance, Srinivasan said that growth at the end of 2024 was supported by picking up exports and consumption. The overall result, however, was weaker than expected because of the slower than the expected start of public investment after the elections and some temporary factors, he added that private investments remained weak in the emerging markets. “The recovery was generally held by shifting from consumption to investment,” he added.
The World Economic Outlook (Weo), released on April 22, was certainly, reduced the forecast of India’s growth over 6.2% for the current fiscal year and reduced its global trade outlook because the US tariff war raised concerns worldwide.
In October, the fund predicted a growth of 6.5% for India, which repeated in January.
According to the IMF, Europe is expected to grow to 0.8% in 2025, while growth in developing markets and developing economies in 2025 and 3.9% in 2026, and in 2026 China is among the most difficult trade measures.
Why Asia is particularly vulnerable
Meanwhile, Srinivasan outlined three key reasons why Asia was particularly exposed to recent shocks from business policy and increasing uncertainty. He noted that many Asian economies were very open and strongly dependent on the goods trade. Their relatively premature re -opening after pandemic management of a strong initial recovery, although more tigher integration of the region into global supply chains increased its exhibition in the US demand.
“The end of the financial market at risk and volatility of assets can further increase capital flows and investments (in the region),” Srinivasan said.
“Compromises become sharper. Extreme flexibility will be a key buffer against shocks. But in the case of increased effects of the financial market volatility, intervention in the game may,” he added.
Srinivasan said that while in many Asian countries it was necessary to smooth out the modification and increase the demand that should be released to release external shocks in many Asian countries.
“To revive productivity and support growth, which is necessary to improve resistance in the medium term, bold and structural reforms are required,” he said.
“The Asian region faces structural challenges, including increasing demographic challenges and productivity growth that has slowed down and remains slow in recent years,” he added.
(Tagstotranslate) Asia Trade Policy Shocks (T) US Tariffs Asia Impact (T) IMF Asia Pacific Outlook (T) India Growth Forecast 2025 (T) Asia Global Trade Integration (T) Trade UNCERTAINTY ASIA (T) India Economic Recovery Measures
