A new World Bank report released Monday says growth in developing East Asia is expected to ease from 6.5% in 2015 to 6.3% in 2016 and 6.2% in 2017-18.
The forecast reflects China's gradual shift to slower, more sustainable growth, expected to be 6.7% in 2016 and 6.5% in 2017, compared with 6.9% in 2015.
The East Asia and Pacific Economic Update examines the region's growth prospects against a challenging backdrop: slow growth in high-income countries, a broad slowdown across emerging markets, weak global trade, persistently low commodity prices, and increasingly volatile global financial markets.
Incoming World Bank East Asia and Pacific Regional Vice President Victoria Kwakwa said, "Developing East Asia and Pacific continues to contribute strongly to global growth. The region accounted for almost two-fifths of global growth in 2015, more than twice the combined contribution of all other developing regions." Not including China, the region's developing countries grew by 4.7% in 2015, and the pace of growth will pick up slightly - to 4.8% in 2016 and 4.9% in 2017-18 - driven by growth in the large Southeast Asian economies.
However, the outlook for individual countries varies, depending on their trade and financial relationships with high-income economies and China, as well as their dependence on commodity exports.
Among the large developing Southeast Asian economies, the Philippines and Vietnam have the strongest growth prospects, both expected to grow by more than 6% in 2016.
Buoyed by strong private consumption and election spending, the Philippines is projected to grow 6.4% in 2016 before tempering slightly to 6.2% in 2017.
In Indonesia, growth is forecast at 5.1% in 2016 and 5.3% in 2017, contingent on the success of recent reforms and implementation of an ambitious public investment programme.
Several small economies, including Lao PDR, Mongolia, and Papua New Guinea, will continue to be affected by low commodity prices and weaker external demand.
Cambodia's growth will be slightly below 7% during 2016-18, reflecting weaker prices for agricultural commodities, constrained garment exports, and moderating growth in tourism.
In the Pacific Island Countries, growth is likely to remain moderate.
World Bank's East Asia and Pacific Region Chief Economist Sudhir Shetty said, "Developing East Asia and Pacific faces elevated risks, including a weaker-than-expected recovery in high-income economies and a faster-than-expected slowdown in China. Countries should adopt monetary and fiscal policies that reduce their exposure to global and regional risks, and continue with structural reforms to boost productivity and promote inclusive growth." The World Bank report, over the longer term calls for governments to boost transparency and strengthen accountability. It urges countries to reduce barriers to regional trade, such as non-tariff measures and regulatory barriers, including to trade in services.