Rising debt in Asia puts region at risk, IMF warns.

According to Krishna Srinivasan of the International Monetary Fund, rising debt levels brought on by inflation and tightening financial conditions across Asia are grounds for alarm.

IMF director for Asia and the Pacific Srinivasan said on CNBC's "Squawk Box Asia" on Wednesday that if you look at debt for the area, if you look at Asia's proportion of total debt, aggregate debt, that's gone up very dramatically.

According to him, the region's debt has increased from 25% before the epidemic to 38% at the moment. Laos, Mongolia, the Maldives, and Papua New Guinea are among the nations at risk, according to Srinivasan, who also noted that Sri Lanka has already stopped making its debt payments.

Laos saw 23.6 percent inflation in June. According to the Asian Development Bank, Mongolia's annual inflation rate would reach 12.4% in 2022. The Maldives has long struggled with a heavy debt load. Although the debt-to-GDP ratio for the Maldives has decreased over the past two years, it is still high at close to 100% of GDP.

"As a result, the region has a large number of debt-ridden nations. And several of these nations are in serious debt trouble. Therefore, that is something we must be aware of "added Srinivasan.

The IMF predicted a steep drop in global growth from 6.1 percent last year to 3.2 percent this year in its global economic outlook, saying growth in both China and India will be affected.

Growth in Asia will consequently be considerably affected in 2022 and 2023, Srinivasan said, decreasing to 4.2 percent and 4.5 percent, respectively.

"We anticipate inflation to play a significant role this year. In fact, we increased our prediction for inflation for all of Asia, and this is especially true for the advanced economies in Asia "added Srinivasan. He avoided making a prediction about "whether we are going to witness a crisis or not" in the area.

"The [growth] markdowns demonstrate the [Ukraine] war's grave consequences. Inflation has significantly increased as a result of the war, "added Srinivasan. According to him, financial conditions have tightened significantly across the board in Asia, particularly as advanced economies hike interest rates.