Growth in developing East Asia to accelerate to 5.1% says World Bank

Growth in developing East Asia and the Pacific is forecast to accelerate to 5.1% in 2023 from 3.5% in 2022, as China’s reopening helps the economy rebound to a 5.1% pace from 3% last year, according to the World Bank’s East Asia and Pacific April 2023 Economic Update.

The World Bank predicted that the Thai economy will expand by 3.6% in 2023 (down from 4.1% October forecast), up from 2.6% last year, thanks to increased private spending, a rebound in the tourism industry, and pent-up demand following China’s reopening.

Although tourism supported growth in countries like Thailand, the Philippines and many Pacific Islands, it still remained below pre-pandemic levels across EAP countries by the end of 2022.

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Growth in the region outside China is anticipated to moderate to 4.9% from the robust post-COVID-19 rebound of 5.8% in 2022, as inflation and elevated household debt in some countries weigh on consumption.

Most of the region’s biggest economies, including those of Indonesia, the Philippines, and Vietnam, are expected to expand more slowly in 2023 than they did in 2022.

With consequences for economic growth, fiscal balances, and health, the rapid aging of East and Southeast Asia’s major economies ushers in a new set of difficulties and dangers. Last but not least, the area is particularly vulnerable to climate threats because of the considerable population and commercial activity along its shores.

Finally, country-specific downside risks include political factors such as general elections in Thailand, civil war in Myanmar.

The election on May 14 will most likely feature a contest between the Pheu Thai party, which is supported by the wealthy Shinawatra family and is led this time by Paetongtarn, the 36-year-old daughter of Thaksin, and the parties aligned with the military-backed establishment, led by Prime Minister Prayut Chan-o-cha.

Due to the country’s rising living expenses and persistently high family debt, Thailand’s economy is the main political problem. Political candidates have responded to this by making promises of more pay, improved employment opportunities, and subsidies during their campaigns.