IMF: A new round of energy shocks will have a negative impact on Asia

Washington, April 16 (Xinhua) -- Krishna Srinivasan, Director of the Asia Pacific Department of the International Monetary Fund (IMF), stated on the 16th that although the Asian economy has maintained resilience at the beginning of the new year, a new round of energy shocks will have a negative impact on Asia due to the region's high dependence on fossil fuels and commodities in conflict areas.

The IMF and World Bank Spring Meetings will be held this week in Washington, D.C., the capital of the United States. Srinivasan said at the press conference that by the end of 2025, the growth performance of most Asian economies will be stronger than expected, largely due to better than expected export and consumption performance, supported by loose policies and financial environment. In terms of exports, the recent strong performance is mainly driven by the strong demand for technology products. In addition, diversified trade with other regions of the world has also buffered the impact of weakened import demand from the United States.

Srinivasan pointed out that in the context of the Middle East conflict, oil and gas prices have risen significantly, and there is significant uncertainty about the duration of the impact. Asia is greatly affected by this energy shock. If the war continues, it may cause broader pressure on the supply chain.

Srinivasan said that the negative impact of energy shocks has been offset by favorable factors that previously supported regional growth. If the scope of the conflict is limited and the duration is short, the growth forecast for Asia remains largely unchanged compared to January and remains the main engine of global growth. Regional growth is expected to slow down from 5% in 2025 to 4.4% in 2026.

Srinivasan also said that in terms of policies, the short-term task for Asian economies is to absorb shocks while maintaining price signals and policy credibility, while the medium-term task is to build a more robust, balanced, and inclusive growth model.