The World Bank reduced its growth forecast for developing countries in East Asia and the Pacific from 5.1 percent to 5 percent this year and from 4.8 percent to 4.5 percent for 2024.
The World Bank published the October update for the semi-annual economic outlook of the East Asia and Pacific region.
In the statement made by the bank regarding the outlook report, it was stated that the growth in developing countries in East Asia and the Pacific will remain strong at 5 percent in 2023, but will slow down in the second half of the year, and that the growth is estimated to be 4.5 percent in 2024. .
The statement noted that although this year’s regional growth is higher than the average growth predicted for other emerging markets and economies, it is lower than the previous forecast, and that the growth among Pacific Island countries is expected to be 5.2 percent.
In the statement, it was stated that growth in China will be 5.1 percent in 2023, and growth in the region excluding China will remain at 4.6 percent.
The statement pointed out that improving external conditions will help growth in the rest of the region next year, and that internal challenges such as the fading of the recovery resulting from the ongoing reopening of the economy in China, rising debts and weakness in the real estate sector will suppress the country’s growth and will reduce growth to 4.4 percent in 2024.
“The role of the service sector in the development of the region may increase”
The statement noted that the intensification of geopolitical tensions and the possibility of natural disasters, including extreme weather events, pose downside risks to the economic outlook of the region.
It was emphasized in the statement that the services sector can play an increasing role in directing development in a region known for its manufacturing-oriented growth, and that this sector has become the main actors contributing to the increase in total labor productivity in the last 10 years.
In the statement, it was stated that service exports in the region increased faster than goods exports, and that the increase in foreign direct investments in the service sector exceeded the growth in the manufacturing sector by 5 times in China, Indonesia, Malaysia, the Philippines and Thailand.
In her assessment of the issue, World Bank East Asia and Pacific Vice President Manuela Ferro emphasized that the East Asia and Pacific region continues to be one of the fastest growing and most dynamic regions in the world, even if growth slows down.
In its report published at the end of March, the bank predicted that the economy of the East Asia and the Pacific region would grow by 5.1 percent this year.
The World Bank, which announced its growth expectation for the region next year as 4.8 percent in its March report, had predicted that China would grow 5.1 percent this year and 4.8 percent next year.