The downside risks to Asia’s economy
The effects of banking sector issues affecting the US and Europe are less pronounced in Asia, which has demonstrated a greater degree of economic resilience.
While Asian policymakers should be wary of the potential consequences of challenges to the US and European banking sectors, the region’s financial destinations have sufficient capital buffers and are not exposed to troubled banks.
Fears of a global recession are among the main factors likely to determine how soon the BOJ ends its massive stimulus.
Asia was among the few bright spots in the global economy, as China’s recovery from the end of its COVID-19 lockdown supported the region’s exports.
The economy grew by 3.21% in 2022 and should expand by 4.62% in 2023, driven by strong domestic demand.
The group’s financial leaders also discussed the challenges associated with China’s outlook.
China’s economy is now in a positive state due to the reopening.
Russia to keep rates in 2023
Russia will keep interest rates at 7.53% in 2023 as the economy grows marginally.
The Bank of Russia left the possibility of raising rates at the meeting.
According to the forecasts of 14 analysts polled in early May, the main rate of the Bank of Russia will end at 7.52% in 2023 and will retreat to 6.52% in the next stage. Forecasts for 2023 ranged from 6.54% to 8.54%.
Analysts are upgrading their forecasts for Russia’s gross domestic product and now expect a rise of 0.1%.
The central bank has raised its forecast, and the International Monetary Fund expects a rise in 2023. However, falling energy revenues will dampen Russia’s economic growth prospects.
Easing the level of the effect of the sanctions increases military production and government spending.
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