World Bank: "East Asia-Pacific Economic Growth Rate Slows from 5.1% to 4.5% This Year"

Although the East Asia and Pacific region's economic growth this year is higher than other parts of the world, it is expected to be lower than last year due to factors such as the slowdown in China's economy.

The World Bank (WB) forecasted in its 'April East Asia and Pacific Economic Update' published on the 31st of last month (local time) that the economic growth rate of the East Asia and Pacific region will decrease from 5.1% last year to 4.5% this year.

[Image source=Reuters Yonhap News]

Excluding China, the economic growth rate is expected to slightly increase from 4.4% last year to 4.6% this year. China’s economic growth rate is predicted to decline from 5.2% last year to 4.5% this year due to high debt levels, a real estate market slump, and trade disputes.

Earlier, the WB projected the global economic growth rate for this year to be 2.4%, down 0.2 percentage points from last year.

While the recovery in global trade benefits the East Asia and Pacific region, trade barriers are rising as major countries seek to nurture their domestic industries, and the high interest rate environment continues. Additionally, increased uncertainty due to geopolitical conflicts may exert downward pressure, the WB analyzed.

According to the WB, if the US economic growth rate decreases by 1.0 percentage point, the East Asia and Pacific region’s economic growth rate falls by 0.5 percentage points. Also, if US interest rates rise by 0.25 percentage points, the East Asia and Pacific region’s economic growth rate declines by 0.5 percentage points. If China’s economic growth rate drops by 1.0 percentage point, the East Asia and Pacific region’s economic growth rate decreases by 0.3 percentage points.

The WB pointed out that over the past 20 years, the East Asia and Pacific region has increased its economic growth rate more through capital accumulation than productivity improvement, and that the pace of productivity improvement at the firm level is slowing. In particular, it noted that the gap between the East Asia and Pacific region and leading global companies has widened in the digital sector.

This content was produced with the assistance of AI translation services.