World Bank: East Asia and Pacific region's growth to slow gradually

The World Bank announced on Monday that growth in the East Asia and Pacific region will maintain its pace this year and the next but will gradually slow down as it released its semi-annual regional outlook.

The region's economies are expected to grow by 5 percent in 2023, with a noticeable slowdown in the second half of the year, dropping to 4.5 percent in 2024, according to the World Bank's projections. The bank particularly cited the impact of the slowdown in China.

Despite growth continuing at a high rate, it is at the lowest projected level since the late 1960s, excluding exceptional periods such as pandemics, the Asian financial crisis of the late 1990s, and the oil shock in the 1970s.

For the current year, China continues to lead the growth in the region, with an expected growth rate of 5.1 percent, while the rest of the region is projected to see cumulative growth of 4.6 percent.

The international institution added in its statement that for 2024, "improving external conditions will support growth in the rest of the region, while China will continue to face ongoing domestic challenges," pointing particularly to high debt levels, weakness in the real estate sector, and structural issues like an aging population.

As a result, the World Bank now expects growth of 4.4 percent for 2024, down from the 4.8 percent projected in April of this year.

Manuela V. Ferro, World Bank Vice President for the East Asia and Pacific Region, said in the statement, "The region remains one of the most dynamic in the world, even with more moderate growth. Over the medium term, maintaining high growth will require reforms to preserve industrial competitiveness."

The competitive edge of the region's countries remains crucial, as their growth continues to be supported by rising exports, offsetting weak domestic demand.

The World Bank highlighted that the development of services is a growth driver in these economies, which are still largely oriented toward industrial production, as well as the wider adoption of digital technologies.


AFP