The World Bank on Monday downgraded its economic projections for the Asia-Pacific region this year, saying the region would experience 7.2 percent growth compared to 8.2 percent in 2011.
Both figures are a sharp decline from the region’s 10 percent growth rate in 2010.
In May, the World Bank predicted the Asia-Pacific region would grow 7.6 percent in 2012.
Growth will rebound to 7.6 percent next year, with growth mainly produced by domestic demand in developing countries, according to the World Bank’s “East Asia and Pacific Economic Data Monitor.” Developed countries will have modest growth, it predicted.
The international lending institution said China’s growth is expected to be 7.7 percent for the full year versus 9.3 percent in 2011 because of weak exports and slower investments. Economists expect the slowdown in China to ripple out to the rest of the world, contributing to a slowdown in growth in other regions.
The World Bank, based in Washington, said China’s Gross Domestic Product would improve to 8.1 percent in 2013 as government stimulus measures kick in and global trade ticks up.
Through an interconnected global economy, weaker demand in Europe and the United States has helped cool the economy in East Asia, but growth there is still much stronger than the rest of the world. Many countries in Europe are in recession and U.S. economic growth in the second quarter was a mere 1.3 percent.
The report says that reconstruction spending in Thailand after last year’s floods will be a strong driver of domestic demand, as will government spending by Indonesia, Thailand and Malaysia. – Eric Kulisch
Washington Notebook: Asia-Pacific slow growth expected, World Bank says
