World Bank Eases Growth Forecast for East Asia Amid Global Headwinds

The World Bank has revised its growth forecast for developing countries in East Asia, citing concerns over a slowing global recovery and rising trade tensions. Despite low oil prices and a continued economic recovery in developed economies, the region is expected to grow at a slower pace this year. The bank's East Asia Pacific Economic Report predicts that developing economies in the region will grow by 6.7 percent in 2015 and 2016, down from 6.9 percent in 2014.

Key Takeaways:

• The World Bank has eased its growth forecast for developing countries in East Asia, citing global headwinds and slowing trade.
• The region is expected to grow at 6.7 percent in 2015 and 2016, down from 6.9 percent in 2014.
• Low oil prices are expected to benefit most developing countries in East Asia, with Cambodia, Laos, Philippines, Thailand, and Pacific island countries expected to see a boost to domestic demand.
• The region's net fuel exporters, including Malaysia and Papua New Guinea, will see slower growth and lower government revenues due to lower oil prices.
• The World Bank emphasizes the need for improving fiscal policy, including reforming energy pricing and reducing fuel subsidies, to sustain productivity growth and expand the revenue base of social security.

Statistics:

• Developing economies in East Asia are projected to grow by 6.7 percent in 2015 and 2016.
• China's growth is expected to moderate to around 7 percent in the next two years compared with 7.4 percent in 2014.
• The growth in the rest of the developing East Asian countries is expected to rise by half a percentage point to 5.1 percent.
• Low global oil prices will benefit most developing countries in East Asia, especially Cambodia, Laos, Philippines, Thailand, and the Pacific island countries.
• The region's net fuel exporters, including Malaysia and Papua New Guinea, will see slower growth and lower government revenues due to lower oil prices.

Sources:

• World Bank, "East Asia Pacific Economic Report" (no date)
• Sudhir Shetty, World Bank East Asia and Pacific Chief Economist, quoted in World Bank release (no date)