Growth in developing East Asia and Pacific has remained resilient and is expected to ease only modestly during 2016-18, according to a new World Bank report. This outlook is subject to elevated risks and countries should continue to prioritize monetary and fiscal policies that reduce vulnerabilities and strengthen credibility, while deepening structural reforms.
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.
"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," said Victoria Kwakwa, incoming World Bank East Asia and Pacific Regional Vice President. "The region has benefited from careful macroeconomic policies, including efforts to boost domestic revenue in some commodity-exporting countries. But sustaining growth amid challenging global conditions will require continued progress on structural reforms."
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.
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.