A number of countries in the Asian region cut their economic growth projections in 2022. Among them, China, India and Japan.
China has set a gross domestic product (GDP) target of around 5.5%, the lowest since 1991 due to uncertainty over the impact of Covid-19, the slump in the property sector, and the Russia-Ukraine war.
Premier Li Keqiang said China was facing more risks and challenges. Therefore, all parties are asked to participate in overcoming it.
"The target is based on the need to maintain a stable job, basic living needs and guard against risk," Li said as quoted by Channel News Asia, Sunday (6/3).
According to Li, the growth target is monitored by the government. In this case, the Chinese Communist Party as the ruler has a role to legitimize in a stable economic expansion plan and according to a better standard of living.
"The party is very concerned about social instability in its large population if economic growth falls too low," he said.
In contrast, Japan's economy grew more than expected in 2021. However, rising input prices are likely to bring wholesale trade inflation near a record in February in a sign of increasing risks to a fragile recovery.
The revised GDP data is likely to show Japan's economy expanding 5.6% yoy in October to December 2021. Slightly higher than the initial target of 5.4%.
Largely because the expected 0.7% increase in capital spending was larger than the initial 0.4% increase. This is reflected in data on business spending in the fourth quarter of 2021 issued by the Japanese Ministry of Finance.
According to Mitsubishi UFJ Research and Consulting economist Shinichiro Kobayashi, the strong economic growth figures do not indicate Japan's full recovery from the blow of the Covid-19 pandemic.
"Even after an upward revision, the GDP measure will remain below pre-pandemic levels in October-December 2019."
With Covid-19 restrictions weighing on consumption and the Ukraine crisis clouding the outlook, many analysts expect Japan's economic growth to slow or even contract this quarter.
The direct hit from the war in Ukraine is likely to come through a spike in fuel and commodity prices. Wholesale trade prices likely rose 8.7% yoy in February, close to a record hit in November due to rising raw material and energy costs.
Separate data will show Japanese household spending likely rose 3.6% in January from a year earlier, marking the first increase in six months.
Read: The Impact of Russia's Invasion of Ukraine, Now Visa and Mastercard Suspend Operations in Russia!
India's growth rate also slowed further in the last three months of 2021. The Office for National Statistics (ONS) cut its 2022 economic forecast as India faces higher oil prices and geopolitical tensions.
India's economy grew 5.4% yoy October to December 2021. That was a slowdown from record growths of 20.1% and 8.4% in the previous two quarters due to a favorable base effect as coronavirus cases dwindle.
ICRA Chief Economist Aditu Nayar said the projection was below estimates. NSO also lowered its growth forecast for the current financial year from 9.2% to 8.9%.
Nayar said the forecast seemed somewhat optimistic given the rise in commodity prices and the larger base effect.
Covid-19 has hit Asia's third-largest economy, which is in its worst recession since independence in 1947 after lockdowns drastically brought factory and consumer spending to a halt.
But since then, India's main economy has rebounded to the world's fastest-growing, with broad vaccine coverage and a lighter-than-expected third wave of infections keeping it on track.
