IMF warns Fed interest rate hikes may delay Asia's economic recovery

Expected interest rate hikes by the U.S. Federal Reserve may delay emerging Asia's economic recovery and keep pressure on policymakers to guard against the risk of capital outflows, a senior International Monetary Fund official said on Tuesday.

Rising inflationary pressure, China's economic slowdown and the spread of coronavirus cases from the Omicron variant also cloud the region's outlook, said Changyong Rhee, director of the IMF's Asia and Pacific Department.

"We are not expecting a U.S. monetary normalisation to cause big shocks or large capital outflows in Asia, but emerging Asia's recovery may be retarded by the higher global interest rates