World Bank sees sustained East Asia growth despite global rout

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World Bank sees sustained East Asia growth despite global rout

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Growth in developing economies in East Asia is holding up despite tough global conditions and a slowdown in China, according to the World Bank.
The Washington-based lender lowered its growth forecast for this year for developing East Asia and Pacific countries only marginally to 6.3 percent from 6.4 percent, it said in a report on Monday. Growth is set to ease from an estimated 6.5 percent in 2015, it said.
While developing nations in East Asia -- from Indonesia to China -- have benefited from careful economic policies, global risks are considerable and threaten the region’s outlook, the lender said. Among these are a slowdown in high-income countries, the slump in exports and financial market volatility.
“Policy makers have less room to maneuver,” Sudhir Shetty, chief economist of the World Bank’s East Asia and Pacific region, said in a statement. “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.”
China outlook
For China alone, the World Bank is forecasting 6.7 percent economic expansion this year, unchanged from its October estimate. Excluding China, the region is projected to grow 4.8 percent this year, up from 4.7 percent in 2015 and 0.1 percentage point lower than previously predicted.
In Southeast Asia, the biggest downgrades in growth forecasts were for Indonesia and Malaysia, both commodity exporters. Indonesia’s estimate for 2016 was lowered by 0.2 percentage points to 5.1 percent, while Malaysia was cut by 0.3 points to 4.4 percent.
The largest forecast upgrade was for Thailand, with the World Bank now projecting expansion of 2.5 percent this year, up from 2 percent in the earlier report.
  2015 growth
2016 growth estimate
Change in 2016 growth estimate from October
Developing East Asia and Pacific
6.5
6.3
-0.1
China
6.9
6.7 0.0
Indonesia
4.8 5.1 -0.2
Malaysia 5 4.4 -0.3
Philippines 5.8 6.4 0.0
Thailand 2.8 2.5 0.5
Vietnam 6.7 6.5 0.2

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