World Bank projects war shocks to drag on Asian economies

Russia’s invasion of Ukraine has driven up prices for oil, gas and other commodities, eating into household purchasing power and burdening businesses and governments that already are contending with high debt due to the pandemic

Disruptions to supplies of commodities, financial strains and higher prices are among the impacts of the war in Ukraine that will slow economies in Asia in coming months, the World Bank says in a report released Tuesday.

The report forecasts slower growth and rising poverty in the Asia-Pacific region this year as “multiple shocks” compound troubles for people and for businesses.

Growth for the region is estimated at 5%, down from the original forecast of 5.4%.

The “low case” scenario foresees growth dipping to 4%, it said. The region saw a rebound to 7.2% growth in 2021 after many economies experienced downturns with the onset of the pandemic.

The World Bank anticipates that China, the region’s largest economy, will expand at a 5% annual pace, much slower than the 8.1% growth of 2021.

Russia’s invasion of Ukraine has helped drive up prices for oil, gas and other commodities, eating into household purchasing power and burdening businesses and governments that already are contending with unusually high levels of debt due to the pandemic, the report said.

The development lending institution urged governments to lift restrictions on trade and services to take advantage of more opportunities for trade and to end fossil fuel subsidies to encourage adoption of more green energy technologies.