ADB slashes Asia growth forecast as fuel, food prices rise

A man walks past the Asian Development Bank (ADB) building in Ortigas City, Philippines on October 8, 2021. (Reuters/File)
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Updated 21 July 2022
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ADB slashes Asia growth forecast as fuel, food prices rise

  • Double-digit inflation has hit most of the Caucasus and Central Asia including Pakistan
  • The growth forecast for East Asia, which includes China, was cut to 3.8 percent from 4.7 percent

MANILA: The Asian Development Bank on Thursday slashed its 2022 growth forecast for developing Asia and warned economic conditions could worsen, as the war in Ukraine and supply chain disruptions drive up prices.

While the impact of Covid-19 had eased, the region was now grappling with the fallout from Russia’s invasion of Ukraine, lockdowns in China and aggressive interest rate hikes, the Philippines-based bank said.

To reflect the deterioration across developing Asia — which stretches from the Cook Islands in the Pacific to Kazakhstan in Central Asia — the bank cut its 2022 growth forecast to 4.6 percent.

That compares with its previous prediction in April of 5.2 percent and the 6.9 percent growth chalked up last year.

It also increased its inflation forecast for the region this year to 4.2 percent, from 3.7 percent, due to surging food and fuel prices.

Risks to the outlook “remain elevated,” the bank warned.

“A substantial slowdown in global growth could hurt exports, manufacturing activity and employment prospects, and cause turbulence in financial markets,” it said.

Double-digit inflation has hit most of the Caucasus and Central Asia — which have close trade and financial ties to Russia — as well as Mongolia, Pakistan, Sri Lanka, Laos and Myanmar.

India’s inflation was above target at seven percent, but in the rest of the region’s large economies it was “manageable.”

But the bank warned: “A worsening fallout from the war in Ukraine could lead to a further surge in global energy and commodity prices, with likely knock-on effects on growth and inflation in developing Asia.”

Adding to the region’s woes was the strengthening US dollar, seen as a safe haven during periods of uncertainty, which the bank said was weighing on regional currencies and stock markets.

“With financial conditions tightening, growth in advanced economies is softening,” the bank said.

“And with activity in the PRC (China) hampered by supply chain disruptions, domestic demand and exports in developing Asia are set to face significant challenges.”

The growth forecast for East Asia, which includes China, was cut to 3.8 percent from 4.7 percent, as Covid-19 lockdowns batter the world’s second-biggest economy.

In South Asia, where bankrupt Sri Lanka is reeling from its worst economic crisis, the bank lowered its growth forecast to 6.5 percent from 7.0 percent previously.

But the bank revised up its forecast for the Pacific to 4.7 percent, from 3.9 percent, on a surprising rebound in tourism in Fiji.


France’s homeless wrap up to survive at freezing year’s end

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France’s homeless wrap up to survive at freezing year’s end

PARIS: In the biting cold, homeless friends Danish and Sylvain walked briskly in the dark toward a hot meal distribution point, rubbing their hands together, their huge backpacks weighing down on their shoulders.
“If you stop, the cold seeps into your bones. As long as we’re walking, we’re producing heat,” said 50-year-old Danish, a Pakistani who asked to withhold his surname to avoid embarrassing his France-based family.
Temperatures in France have dropped in recent weeks and are expected to hover around zero in many areas on New Year’s Eve.
Several French regions including Paris have increased shelter beds to help the homeless, but reports have already emerged of some appearing to have frozen to death.
Sylvain, 52, said he and his companion checked the weather forecast on their phones every night to best prepare.
The Frenchman, who also did not want to give his surname to protect his three children, said he wore six layers on his chest — a t-shirt, a jumper, a fleece, a waistcoat and two jackets.
“The trick is to let air between the layers. If it’s too tight, there’s not much isolation,” he said.
He also wears tights and two pairs of socks, and he tops it all off with a beanie, a cap and a furry hat with flaps.
“You lose heat through the top of your head,” he said.
Neither he, nor his companion Danish, drink alcohol, he said.
“It makes you numb so you don’t know when you’re cold, and you can slip away during the night,” Sylvain said.

- ‘Sleep without fear’ -

This winter has already proven deadly.
A homeless man was found lifeless in a Paris street on Sunday, likely having frozen to death, a police source said. He had been staying in a nearby shelter.
On Christmas day, a 35-year-old homeless person was found dead in the northern city of Reims, a prosecutor said.
There are no recent official figures on homelessness in France. But the Housing Foundation, a charity, estimates 350,000 people do not have a permanent home — including 20,000 who sleep rough nationwide. Many in Paris are undocumented migrants.
More than 900 people without a home died throughout the year in 2024, on average aged 47, according to a charity called Dead in the Street.
Paris authorities say they have set up emergency shelters in sports halls and schools to help during the cold wave, while charities too have added beds to their facilities.
At a charity-run shelter in Paris, which provides bedding for more than 370 people on seven floors, volunteers have been handing out hot meals.
Nakunzi Fumiasuca, a 36-year-old from the Democratic Republic of Congo, said he had been living in a tent until he was offered a bed.
“Here I can sleep without fear,” he said.
Taha Nouri, a 32-year-old who arrived in France from Libya in 2021, came after the charity brought him in, telling him he could stay for a week.
“I was able to have a shower, eat well, see a doctor and get medicine,” he said.
But Danish and Sylvain say their calls to a hotline to request shelter never go through.
Instead they have been sleeping rough in one of the main train stations in Paris — always trying to watch out that no one steals their blanket.
“When you have one stolen and it’s cold, it’s a disaster,” said Sylvain. “Your only option is to ride the night bus around Paris until dawn.”

- ‘Time stopped’ -

Danish said he came to France with his father three decades ago and was working as a waiter, but ended up in the street after a dispute with his boss three months ago.
“I’m deeply ashamed sometimes,” he said. “I don’t want my family to see me like this.”
Sylvain said he worked as a cleaner for 15 years before a painful separation from his wife in 2022 pushed him into the street.
When he left, his three children were eight, 12 and 16, he said.
“Time stopped,” he said.
He speaks to them on the phone every week, but tells them he is “staying with a friend.”
Until they can find a solution, the two men plan their lives around the capital’s free food distributions.
Keeping clean is difficult as public bathrooms are often closed or out of hot water, Sylvain said.
But Danish insisted they do their best with cold water.
Sometimes there are good surprises. Last week, a charity handed Sylvain what he said was “a real present.”
“It had everything: a hat, toothpaste, cotton buds and even perfume — not the cheap kind,” he said.
But at the weekend, Sylvain said, he had to rip out two teeth himself to stop a throbbing toothache.
“I gave them a good yank and now it’s sorted,” he said.