World Bank raises 2023 growth outlook for East Asia as China reopens

The Washington-based lender said in a statement that it expects growth in the 23-nation region, including China, to pick up to 5.1% from 3.5% last year.

According to the World Bank, as China reopens, there is a strong forecast that the country’s economy will grow by 5.1% from 3% last year.

Developing countries in East Asia and the Pacific include Vietnam, the Philippines, Malaysia, Indonesia, Thailand, and Mongolia, and island nations such as Fiji, Vanuatu, and Palau.

Excluding China, the region’s growth is expected to slow to 4.9% in 2022, following a recovery of 5.8%, as inflation and high household debt weigh on consumption in some countries.

“Most major economies in East Asia and the Pacific have overcome the challenges of the pandemic, but are now navigating a changed global landscape,” said World Bank Vice President for the Region Manuela Ferro.

“More work needs to be done to regain momentum, drive innovation and productivity, and lay the foundations for a greener recovery.”

According to the lender, the most immediate challenge is the growing rift between China and the US.

More radical is bilateral control of technology flows and cooperation that can limit global access to knowledge.

“Although China is still small compared to advanced economies such as the United States, it has become an important source of knowledge for innovation in other East Asian and Pacific countries,” the report said.

The multilateral aid agency recommended that they reform their policies to boost growth and participate in international agreements with both China and the US rather than being part of an exclusive trade bloc.