Stagflation risk rising, but growth in Asia is still the base case scenario

AS inflation continues to climb and global growth is crimped by slowdowns in China and the United States, Katrina Ell, senior Asia-Pacific (APAC) economist at Moody’s Analytics, described the risk of stagflation in major economies as “its highest in decades”.

Natixis Investment Managers warned in an outlook report this month that “‘slowflation’ is becoming a reality”, where the world economy escapes recession but faces a sharp slowdown.

Still, Ell and other economists told The Business Times that stagflation is not a baseline scenario for APAC as economic growth is expected to stay positive on a rebound in domestic demand, especially in the Asean region, despite rising higher prices.