Connect with us

News

IMF head flags inflation, China slowdown as risks to Asia

Published

on

International Monetary Fund Managing Director Kristalina Georgieva has flagged rising inflationary pressures and China’s economic slowdown as risks to Asia’s economic outlook, calling on policymakers to rebuild their buffers against future shocks.Asian Development Bank President Masatsugu Asakawa also urged Asia’s policymakers to be vigilant to signs of any abrupt capital outflows driven by steady United States interest rate hikes.

“We are already seeing the risk of aggressive tightening of US monetary policy to fight inflation, which may trigger abrupt reversals of capital flows or sharp currency depreciation,” Asakawa said in a video message broadcast at an ASEAN+3 forum held in Singapore on Friday.

Georgieva said economies comprising the Association of Southeast Asian Nations (ASEAN) are a “bright spot” in the global economy, with growth projected at 5 percent this year and moderating slightly in 2023.But she warned the outlook was “exceptionally” uncertain and dominated by risks, such as the fallout from Russia’s war in Ukraine, global financial tightening and a slowdown in China’s growth.

“Another pressing global challenge is inflation. It is expected to average only 4 percent in Asia this year. But inflationary pressures in the region are rising,” Georgieva said.

“We don’t know how long this shock will last and whether other shocks may come. But we need to rebuild and preserve buffers and be prepared to fully use our policy tool-kit,” she told the same forum.

China’s strict COVID lockdowns have weighed on already slowing global growth by dampening domestic economic activity and disrupting supply chains for manufacturers across the world.The fallout from China’s slowdown has been particularly painful in Asia, where factory activity slumped across the region in November.

Some emerging nations have also been forced to raise interest rates to combat capital outflows caused by US rate hikes, at the cost of hurting their fragile economies.At the forum, Bank of Japan Governor Haruhiko Kuroda said he did not see a significant risk of Asia facing a sudden loss of confidence or a renewed financial crisis.But he warned against complacency as some Asian countries saw their policy buffers decrease, after deploying big spending packages to counter the COVID-19 pandemic.

“As the recent market turmoil in the United Kingdom has shown, the reaction of market participants to policy decisions and announcements could signficantly impact asset prices,” said Kuroda, who was formerly head of ADB and Japan’s top currency diplomat.

“ASEAN policymakers must be vigilant” to risks and offer “clear, sufficient and timely communication to avoid unintended outcomes,” he said.

SOURCE: Al Jazeera



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News

Tobacco and alcohol claim 22,000 lives annually

Published

on

Health and Mass Media Secretary Dr Anil Jasinghe speaking to NPP MP Samanmali Gunasinghe during the sectoral oversight committee meeting

NATA to be given more powers

The Parliamentary Sectoral Oversight Committee on Health, Mass Media and Women’s Empowerment has agreed in principle to ban single-stick sales of cigarettes and increase taxes on tobacco products, according to parliamentary sources.

The decision was reached during an institutional review of the National Authority on Tobacco and Alcohol (NATA) held recently in Parliament. The meeting was chaired by MP Dr. Nihal Abeysinghe.

During the review, NATA officials informed the committee that approximately 22,000 deaths occurred annually in Sri Lanka due to tobacco and alcohol consumption. They said the country suffered an economic loss of between Rs. 225 billion and Rs. 240 billion each year due to the consumption of tobacco products and alcohol.

Officials told the committee that steps were underway to amend the National Authority on Tobacco and Alcohol Act to grant it more powers.

Noting that 104 countries had already banned the sale of loose cigarettes, the underscored the need for Sri Lanka to adopt a similar policy. When loose cigarettes were sold, mandatory health warnings on cigarette packets were not visible to consumers, the NATA officials said.

The committee was also briefed on the importance of imposing taxes on cigarettes after determining their retail prices, as part of broader measures aimed at reducing tobacco consumption.

Commenting on the matter, Dr. Abeysinghe said the committee was prepared to extend its full support for the proposed amendments to the Act, as well as for other programmes and initiatives undertaken by the National Authority on Tobacco and Alcohol.

Deputy Chair of the Committees Hemali Weerasekara, committee members MPs Dayasiri Jayasekara, Muneer Mulaffer, Samanmali Gunasinghe, Prof Sena Nanayakkara, Dr S. Sri Bhavanandarajah, Dr Ramanathan Archchuna and with the permission of the Chair, MPs Dr. Janaka Senarathna and Dr Pathmanathan Sathiyalingam were present at the committee meeting.

Continue Reading

News

Development Officers hunger strike drags on for fourth day

Published

on

Development officers on hunger strike demanding absorption into the teacher service, outside the Presidential Secretariat at Colombo.

The hunger strike launched by a group of Development Officers demanding their absorption into the teacher service entered its fourth day yesterday (29) outside the Presidential Secretariat Colombo.The protesters, members of the Ceylon School Development Officers’ Union (CSDOU), began their satyagraha on January 26.

One of the four officers participating in the fast-unto-death fell seriously ill on the fourth day and was rushed to hospital for treatment, while the remaining three continued the hunger strike. Earlier, Dr. Chamal Sanjeewa, President of the Doctors’ Trade Union Alliance for Medical and Civil Rights, visited the protest site to examine the health of the protesters and oversaw the administration of saline to those suffering from dehydration.

CSDOU Secretary Viraj Manaranga criticised authorities for refusing to listen to the protestors.

“Not a single official from the relevant authorities has come forward to hear our grievances, which is a matter of serious concern,” he said, accusing the government of negligence and “stepmotherly treatment” of the issue.

The Ceylon Teachers’ Union (CTU) echoed the need for legal and procedural adherence, noting that there are currently 40,000 teacher vacancies nationwide. The union stressed that a significant number of development officers and graduates remain outside the teaching service, despite provisions in the teacher service constitution allowing for their appointments, which fall under the powers of Provincial Councils.

National People’s Power (NPP) MP Chandana Sooriyarachchi said graduate development officers are required to sit a compulsory competitive examination. Former Education Minister Akila Viraj Kariyawasam, who oversaw appointments under the Good Governance administration, also stated that direct appointments are legally not feasible. He added that school development officers were absorbed into the teacher service in 2018 through competitive exams and stressed that appointments must follow established procedures, warning that strikes would not alter this process.

The hunger strike continues to draw attention to the demands of the Development Officers as they urge the government to take immediate steps to address their grievances.

Continue Reading

News

IMF urges Lanka to diversify trade amidst global tariff risks

Published

on

Srinivasan

Sri Lanka and other small Asian economies must accelerate trade diversification or face heightened vulnerability to global tariff disputes and shifting supply chains, warned Krishna Srinivasan, Director of the Asia and Pacific Department at the International Monetary Fund (IMF).

Speaking in Colombo on the evolving global trade landscape, Srinivasan highlighted Asia’s growing exposure, particularly in the wake of tariff tensions between the United States and China. “Asia benefited a lot from trade integration, benefited a lot from openness to trade,” he said. “So much so that when tariffs were imposed by the US, Asia was subject to the highest level of tariffs.”

He cautioned that the region that gained most from open markets is now at risk of bearing the brunt of protectionist measures. For countries like Sri Lanka, he said, the message is clear: diversify or be exposed.

Srinivasan also noted that South Asia remains the least integrated sub-region in the continent. “Having greater integration with your partners within the sub-region will take you a long way,” he said. For small economies, he added, building deeper trade ties with neighbours and broadening export and production bases is essential for resilience.

Meanwhile, Sri Lanka has received a strong vote of confidence from the IMF following a high-level meeting between President Anura Kumara Dissanayake and the delegation at the Presidential Secretariat.

The visiting IMF representatives, who arrived on January 22 to assess the damage caused by Cyclone Ditwah, spent a week touring the island, engaging with affected communities and observing the impact firsthand. In a briefing, the delegation praised the government’s swift relief efforts, infrastructure restoration, and commitment to rebuilding lives, noting widespread appreciation among citizens for the administration’s handling of the crisis.

Continue Reading

Trending