World Bank cuts growth estimates for East Asia to 5% in 2023; slashes China’s 2024 GDP growth amid property crisis
- The gross domestic product growth is estimated at 5% in 2023 and 4.5% in 2024 as compared to April forecasts of 5.1% for this year and 4.8% for the next, according to the World Bank’s East Asia and Pacific October 2023 Economic Update.
The World Bank has cut its growth estimates for developing countries in East Asia and Pacific as the region remains under stress of tighter finances and a weak global environment.
The gross domestic product (GDP) growth is estimated at 5% in 2023 and 4.5% in 2024 as compared to April forecasts of 5.1% for this year and 4.8% for the next, according to the World Bank’s East Asia and Pacific October 2023 Economic Update.
The regional growth this year is higher than average growth projected for all other emerging market and developing economies but lower than previously projected.
Growth in the world’s second-largest economy China in 2023 is projected to be 5.1% and in the region excluding China to be 4.6%. Growth among Pacific Island Countries is expected to be 5.2%.
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China’s GDP growth estimates for next year have been cut to 4.4% from the 4.8% previously projected.
“In 2024, improving external conditions will help growth in the rest of the region but persistent domestic difficulties in China – the fading of the bounce back from the re-opening of the economy, elevated debt, and weakness in the property sector, structural factors such as aging – will weigh on growth in China, slowing it to 4.4% in 2024,” World Bank said.
Growth in the rest of the region is expected to edge up to 4.7% in 2024, as recovery in global growth and easing of financial conditions offsets the impact of slowing growth in China and trade policy measures in other countries, it added.
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“What happens in China matters for the whole region,” the report read. “A 1% reduction in its growth is associated with a reduction in regional growth by 0.3 percentage points.”
Excluding China, East Asia and the Pacific should see slightly faster growth in 2024 as the global economy improves and revives foreign demand for the region’s manufactured goods and commodities, the World Bank said.
“The East Asia and Pacific region remains one of the fastest growing and most dynamic regions in the world, even if growth is moderating,” said World Bank East Asia and Pacific Vice-President Manuela V. Ferro.
“Over the medium term, sustaining high growth will require reforms to maintain industrial competitiveness, diversify trading partners, and unleash the productivity-enhancing and job-creating potential of the services sector.”
Meanwhile, geopolitical tensions, possible natural disasters including extreme weather events are downside risks to the outlook, the report said.
(With inputs from Bloomberg)
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Business NewsEconomyWorld Bank cuts growth estimates for East Asia to 5% in 2023; slashes China’s 2024 GDP growth amid property crisis
First Published:2 Oct 2023, 09:36 AM IST
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