The International Monetary Fund (IMF) said on the 16th, local time, that the Asia-Pacific economy is relatively more exposed to the energy supply shock caused by the war involving the United States, Israel, and Iran.
Krishna Srinivasan, IMF Asia-Pacific Director General, said at a regional economic outlook briefing held in Washington, D.C., that "in the context of the Middle East war, there is uncertainty over how long the shock from the sharp rise in oil and gas prices will persist," and "Asia is significantly exposed to this energy shock."
The IMF pointed to high energy intensity and import dependence as reasons the Asia-Pacific region is more exposed to the shock from the war. It also noted vulnerability to supply shocks for major petrochemical products such as chemical fertilizers.
Director General Srinivasan said, "In this region, oil and gas consumption amounts to about 4% of total gross domestic product (GDP)," adding, "That is almost twice Europe's."
The IMF said that because of this energy shock, the Asia-Pacific region's economic growth rate is expected to slow from 5.0% last year to 4.4% this year, while the inflation rate is projected to rise from 1.4% last year to 2.6% this year.
Director General Srinivasan added that Southeast Asia's economy, in particular, will take the hardest hit.