inflation and high interest rates, and banking instability have contributed to this year s gloomy economic forecast stock but it is a global recession is not likely stop business reporter katie silver has been looking into this story for us and joins me now on the programme with the details. great to get you on the show. talk through what you have seen today. 50 talk through what you have seen toda . ~ ., , talk through what you have seen toda . ~ .,, , today. so the imf has seen it has been today. so the imf has seen it has been a today. so the imf has seen it has been a perilous - today. so the imf has seen it i has been a perilous combination of vulnerabilities and they are calling on central banks around the world to keep monetary policy tight and that means high interest rates in order to stave off dental economic crisis or a decrease in economic growth. so the fund has revised their forecast for this year and next, lowering both from what was predicted in january by
inflation, inflation in asia is coming down, headline inflation is coming down, but core inflation is well above central bank tige simmons economies of the region. and we expect core inflation to be sticky. there are a couple of forces at work. one is in asia in many countries, they re closing countries, they re closing close, countries, they re closing close, and significantly back of the position which happened last year. what we find is when inflation is high the exchange can be quite long and hard, so these factors lead us to believe that core inflation or underlying inflation in asia could be sticky, which means that countries in the region have to tackle this by continuing with the base tightening, so higherfor tightening, so higher for longer tightening, so higherfor longer is what we would say is the monetary policy in asia. that is the first factor, the second factor is debt levels in
asia have risen quite a lot from the pandemic, pre pandemic a s share of it was 3.5%, now altis re buy daveson, that is debt across public sector balance sheets, and other balance sheets, and other balance sheets. so in the context of high interest rates that could be a significant headwind for growth in some parts of asia. headwind for growth in some parts of asia. right. and when we will be parts of asia. right. and when we will be looking parts of asia. right. and when we will be looking at very - we will be looking at very closely on asia business report. for now, thank you very much forjoining us. krishna srinivasan, the imf director for the asia pacific region. the spanish vice presidents as the means of the chinese economy means it cannot be overlooked and there has been a tectonic shift in the international world order. north america business correspondence samira hussain was speaking to her on the sidelines of the meeting. indie sidelines of the meeting. we cannot just
panning out? sorry, couldn t hear what your reporter said | hear what your reporter said earlier, let me report for asia we have growth at ii.i6 s in 2023, this reflects a couple of big changes, emerging markets in asia we have growth at 4.3% and four the advance we have i.6%, this is an adjustment upwards of 0.4 percentage points for emerging markets and lowerfor points for emerging markets and lower for advanced economies points for emerging markets and lowerfor advanced economies in lower for advanced economies in asia. lowerfor advanced economies in asia. now, for emerging markets, the big news for china where we have increased production sent the projection from 4.4% from 2 october by 20% now. this reflects largely a rebound in consumption following owner opening of the economy forced economic restraints being lifted, so we have consumption led growth or projected consumption led growth in china which will provide the rest of the region in asia. it s interesting you say that,
a distinction here, what i - ahead. i think we need to make a distinction here, what i was . a distinction here, what i was talking about was the growth projection for 2023, where we had earlier 4.4% and now we have 5.2%. and one factor to note is every time china s growth goes up by one percentage point, the rest of asia goes zero and three percentage points over the medium term. that said, we have lowered our forecast for growth in china over the medium term below 4%, so that is what really she was talking about, but of course you also have countries like india, which are going pretty fast at five x 9% in 2023 going pretty fast at five x 9% in 2023 growing. we need to discuss the short term fillip to the medium term headwinds in asia. i to the medium-term headwinds in asia. ~ ., , to the medium-term headwinds in asia. ~ . , ., ., , asia. i think that is a really aood asia. i think that is a really good point- asia. i think that is a really good point. just asia. i think that