The World Bank forecasts slower economic growth in developing East Asian economies this year, due partially to tighter global monetary conditions.
According to its East Asia Pacific Economic Update, released on 6 October, the economies in developing countries in East Asia and the Pacific are likely to grow 6.9% this year and next, slower than the 7.1% annual expansion that the bank forecast in April. In 2013, the region grew 7.2%.
Excluding China, developing East Asian countries are expected to grow 4.8% this year and 5.3% in 2015 from 5.2% in 2013.
As a group, Southeast Asia's five biggest economies — Indonesia, Malaysia, the Philippines, Thailand, and Vietnam — are forecast to slow growth to 4.5% this year, down from 5.0% in 2013, but will expand 5% next year, based on increased demand for exports.
• Indonesia is expected to grow 5.2% this year and 5.6% next year, compared with 5.8% growth in 2013.
• Malaysia is forecast to grow 5.7% this year and 4.9% next year, up from 4.7% growth in 2013.
• The Philippines is forecast to grow 6.4% this year and 6.7% in 2015, up from 7.2% in 2013.
• Thailand is likely to grow 1.5% this year and 3.5% next year, up from 2.9% in 2013.
• Vietnam is expected to grow 5.4% this year and 5.5% next year, compared with 5.4% growth in 2013.
The revised forecast is that China's economy will grow 7.4% this year and 7.2% next year, compared with 7.6% and 7.5% projected in April. World Bank attributes this to financial vulnerabilities and structural constraints. In 2013, China's economy expanded 7.7%.
The World Bank says the region is vulnerable to a sharp slowdown in China, which could hurt regional commodity producers, although such a dramatic slowdown is unlikely.
The East Asia and Pacific Update is the World Bank's comprehensive review of regional economies, published twice yearly: www.worldbank.org/eapupdate
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