Global and Regional Shocks: Challenges to Asian

Two major economic problems are currently shadowing Asian economies. On the one hand, the slowdown in the US economy, ignited by the subprime mortgage crisis, may not be confined to the US region and may affect Asian countries as well. On the other hand, the recent fuel and food price increases, a global shock in nature, are also likely to influence most Asian economies that are heavily dependent on oil imports. This short article, summarises recent studies on these issues, and addresses how Asian economies in particular are challenged by these important developments in the world economy. Policy issues faced by the policymakers in Asia are identified. [ADBI WP120]