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World Bank lowers growth forecast for developing East Asia due to China’s slowing economy
The World Bank has lowered its growth forecast for developing East Asia and the Pacific due to a sluggish China, weak global demand, high interest rates, and dampened trade.
Key Takeaways
- The World Bank has lowered its growth forecast for developing East Asia and the Pacific due to sluggish China, global demand, high interest rates, and dampened trade.
- The increase in government and corporate debt levels, particularly in China, Thailand, and Vietnam, poses a risk to investment growth in the region.
- High household debt in China, Malaysia, and Thailand could negatively impact consumption growth, as more income is used to service debts, leading to cuts in spending.
It now predicts a 5% growth for the region in 2023, slightly lower than the previous forecast. The bank also lowered its growth estimate for China in 2024, citing debt levels and weakness in the property sector.
China’s economic struggles, including property issues and increasing debt, are contributing to this slowdown. However, if China is excluded, the region may see slightly faster growth in 2024 as the global economy improves. The report also highlights geopolitical tensions and potential natural disasters as risks to the region’s outlook.
The report highlights the increase in government and corporate debt levels, which could limit investment and lead to higher interest rates. High household debt in China, Malaysia, and Thailand could negatively impact consumption.
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