The World Bank’s latest report indicates that developing economies in East Asia and the Pacific are expected to experience slower growth in the coming years due to the impact of tighter finances and a challenging global environment. According to the semi-annual outlook, the region is estimated to achieve a gross domestic product (GDP) growth rate of 5% in 2023 and 4.5% in 2024. These figures represent a slight revision from the April forecasts of 5.1% growth for this year and 4.8% for the next. However, it’s worth noting that the region’s growth is still expected to outpace many other emerging markets.
China plays a significant role in this economic landscape, and its economic prospects are influencing the overall outlook. China, the world’s second-largest economy, is anticipated to expand by 4.4% next year, down from the previous projection of 4.8%. This downward revision is attributed to challenges such as property market issues, rising debt levels, and the diminishing economic boost from the post-Covid reopening. Nevertheless, the GDP forecast for China in 2023 remains at 5.1%.
The report emphasizes the importance of China’s economic performance for the entire region, noting that a 1% reduction in China’s growth is associated with a 0.3 percentage point reduction in regional growth.
When excluding China from the analysis, the report suggests that East Asia and the Pacific could experience slightly faster growth in 2024, driven by an improvement in the global economy and increased foreign demand for the region’s manufactured goods and commodities. Nevertheless, the outlook is not without risks, including geopolitical tensions and the potential for natural disasters and extreme weather events.
