East Asia Pacific to sustain growth amid global headwinds: World Bank

While recovering global trade and easing financial conditions will support economies in the region, increasing protectionism and policy uncertainty will dampen growth, it noted.

Regional growth is projected to ease to 4.5 per cent this year from 5.1 per cent last year, the update says.

Growth in developing East Asia and Pacific excluding China is projected to pick up to 4.6 per cent this year, up from 4.4 per cent in 2023.

Growth in China is projected to moderate to 4.5 per cent from 5.2 per cent in 2023, as high debt, a weak property sector, and trade frictions weigh on the economy.

Among Pacific Island countries, growth is forecast to slow to 3.6 per cent in 2024 from 5.6 per cent last year as the post-pandemic rebound dissipates.

“The East Asia and Pacific region is making a strong contribution to world economic growth, even as it faces a more challenging and uncertain global environment, aging population and the impacts of climate change,” said World Bank East Asia and Pacific vice president Manuela V Ferro, in a World Bank release.

“Countries of the region can sustain their growth momentum by accelerating the opening of more activities to private sector investment, resolving financial sector challenges, and boosting productivity,” she said.

The outlook is subject to downside risks, which include a greater than expected slowdown in the global economy, higher for longer interest rates in major economies, increased uncertainty around the world about economic policies, and an intensification of geopolitical tensions, the World bank document said.

The report offers evidence that productivity growth among leading firms in the region has lagged that of leading global companies. The gap is especially stark in digital-intensive sectors.

As new technologies typically gain traction first among leading firms and cascade later to other businesses, this trend raises concern across the business spectrum.

Impediments to competition, uneven worker skills and weak management contribute to lagging productivity growth among firms. Opening goods and services to greater competition and enhancing human capital – through investments in teachers and in tertiary education – can help increase productivity, the World Bank noted.

Fibre2Fashion News Desk (DS)