Developing East Asia and Pacific 2020 GDP growth to slow to 0.9%

SINGAPORE (ICIS)–Economic growth in developing
East Asia and the Pacific region is expected to
slow down this year to 0.9%, the slowest pace
since 1967, weighed down by the coronavirus
pandemic and efforts to contain its spread, the
World Bank said late on Monday.

The region’s economy expanded by 5.8% in 2019,
the World Bank said.

China is forecast to post a GDP growth of 2.0%
in 2020 – boosted by government spending,
strong exports, and a low rate of new
coronavirus infections since March, but checked
by slow domestic consumption – while the rest
of the region is projected to contract by 3.5%.

The world’s second-biggest economy will witness
a marked slowdown in growth from a 6.1% pace in
2019 but will avoid a recession.

“Prospects for the region are brighter in 2021,
with growth expected to be 7.9% in China and
5.1% in the rest of the region, based on the
assumption of continued recovery and
normalisation of activity in major economies,
linked to the possible arrival of a vaccine,”
the World Bank said.

However, output is projected to remain well
below pre-pandemic projections for the next two
years, it said.

“Covid-19 [coronavirus disease 2019] will have
a lasting impact on inclusive longer-term
growth by hurting investment, human capital,
and productivity,” the World Bank said.

“Public and private indebtedness, along with
worsening bank balance sheets and increased
uncertainty, are likely to inhibit investment
and pose a risk to economic stability,” it
added.

World Bank Economic Growth
Forecasts