Swiss Re expects an economic shock in Asia

The Asian countries are likely to experience an economic shock in 2022, according to a note from the Swiss Re Institute. Rising food and commodity prices are among the main causes of the crisis.

In Asia-Pacific, many countries import commodities that are essential to their industries. The prices of these commodities have risen sharply, which has short-term implications for production levels, incomes and GDP.

Food security is also likely to be disrupted in several countries in the region. High prices will require importers to reduce the quantities purchased and allocate a larger budget for imports.

Some countries will be less affected by the economic shock. This is the case for China, India and Indonesia, which produce most of the products they consume. These countries, which have achieved food self-sufficiency, will nevertheless bear the effects of rising fertilizer and transport costs, not to mention the risk of natural disasters, which are constantly increasing in frequency and intensity.

Another predictable fact is that Asian export-based economies will face headwinds from a growth slowdown in the developed world. This will mainly be the result of rising oil and fuel prices.