AFP, Singapore :
The World Bank on Monday cut its growth forecasts for developing economies in East Asia and the Pacific but allayed fears of a hard landing for China’s slowing economy.
The bank also said it expects any increase in US interest rates to have an orderly impact but warned of a risk that markets could react sharply, causing regional currencies to fall further.
In a report on 14 economies led by China, the bank called on them to mitigate the impact of the slowing Chinese economy and any increase in US rates by adopting “prudent macro-economic management” and deeper structural reforms. “The baseline growth projections for China assume a further gradual slowdown in 2016-17,” the bank said, playing down concerns that the world’s second largest economy could slow down abruptly following stock market turmoil and a softening manufacturing sector.
“China has sufficient policy buffers to address these risks and prevent a sharp slowdown,” it said. In its updated outlook for the region, the bank said China’s gross domestic product (GDP) is expected to grow by 6.9 percent this year, moderating to 6.7 percent next year and 6.5 percent in 2017. GDP rose 7.3 percent in 2014.
The forecasts were slightly lower than the bank’s projections in April.
For developing economies in the East Asia-Pacific region, average growth is forecast at 6.5 percent this year, 6.4 percent next year and 6.3 percent in 2017. This is down from 6.8 percent actual growth in 2014.
“This reflects mainly a moderate slowdown in China,” the bank said.
The 14-country forecast also includes Indonesia, Malaysia, the Philippines, Thailand, Vietnam, Cambodia, Laos, Myanmar, Mongolia, Fiji, Papua New Guinea, the Solomon Islands and East Timor.
Among the bigger Southeast Asian countries, the Philippines and Vietnam are expected to be the stronger performers as weak commodity prices hobble growth in oil exporters Indonesia and Malaysia.
The Philippine economy is forecast to grow by 5.8 percent this year, 6.4 percent next year and 6.2 percent in 2017, compared with 6.1 percent in 2014.
The World Bank on Monday cut its growth forecasts for developing economies in East Asia and the Pacific but allayed fears of a hard landing for China’s slowing economy.
The bank also said it expects any increase in US interest rates to have an orderly impact but warned of a risk that markets could react sharply, causing regional currencies to fall further.
In a report on 14 economies led by China, the bank called on them to mitigate the impact of the slowing Chinese economy and any increase in US rates by adopting “prudent macro-economic management” and deeper structural reforms. “The baseline growth projections for China assume a further gradual slowdown in 2016-17,” the bank said, playing down concerns that the world’s second largest economy could slow down abruptly following stock market turmoil and a softening manufacturing sector.
“China has sufficient policy buffers to address these risks and prevent a sharp slowdown,” it said. In its updated outlook for the region, the bank said China’s gross domestic product (GDP) is expected to grow by 6.9 percent this year, moderating to 6.7 percent next year and 6.5 percent in 2017. GDP rose 7.3 percent in 2014.
The forecasts were slightly lower than the bank’s projections in April.
For developing economies in the East Asia-Pacific region, average growth is forecast at 6.5 percent this year, 6.4 percent next year and 6.3 percent in 2017. This is down from 6.8 percent actual growth in 2014.
“This reflects mainly a moderate slowdown in China,” the bank said.
The 14-country forecast also includes Indonesia, Malaysia, the Philippines, Thailand, Vietnam, Cambodia, Laos, Myanmar, Mongolia, Fiji, Papua New Guinea, the Solomon Islands and East Timor.
Among the bigger Southeast Asian countries, the Philippines and Vietnam are expected to be the stronger performers as weak commodity prices hobble growth in oil exporters Indonesia and Malaysia.
The Philippine economy is forecast to grow by 5.8 percent this year, 6.4 percent next year and 6.2 percent in 2017, compared with 6.1 percent in 2014.
