Countries in the Asian region, including India, faces difficult policy trade-offs in the wake of the Russia-Ukraine conflict, as governments face the unenviable task of managing runaway inflation without upsetting growth dynamics, according to the International Monetary Fund (IMF). Policymakers should, therefore, protect the most vulnerable from rising fuel and food costs while enacting economic reforms to boost long-term growth, it said in its regional economic outlook. The IMF last week trimmed its FY23 India outlook by 80 basis points from an earlier forecast to 8.2 per cent, citing the Ukraine war and risks from high commodity prices. A surge in global oil prices caused by the Ukraine crisis will be a drag on India’s growth and increase current account deficit while driving up inflation, it said, suggesting monetary tightening to curb price expectations. —FE
