April 7, 2010, 12.36 pm (Singapore time)
World Bank raises E Asia GDP forecast; sees challenges
BEIJING - The World Bank sharply raised its forecast for economic growth in East Asia to reflect reviving global demand, sustained fiscal and monetary stimulus in the region and a rapid rebound in consumer spending.
The developing economies of East Asia will grow by 8.7 per cent in 2010, the bank said in a semi-annual economic update published on Wednesday. In November, it had projected 7.8 per cent growth.
Stripping out China, growth will spurt to 5.5 per cent in 2010 from 1.3 per cent in 2009, the Washington-based lender said.
Vikram Nehru, World Bank chief economist for the East Asia Pacific region, said policymakers needed to plan for slower growth in developed countries, tighter global financial conditions, rising concerns about developed countries' debt levels, and a more difficult environment for global trade.
'In that setting, the developing countries of East Asia will need to carefully manage the withdrawal of fiscal stimulus measures in the short term while returning to their structural reform agendas to promote growth in the long term,' he said in a statement.
For China, structural reform means rebalancing the economy, including a larger role for the service sector and private consumption and moving away from investment-heavy export-led growth as well as encouraging environmental sustainability.
For middle-income countries, such as Indonesia and Thailand, the emphasis should be on investment in human and physical capital.
In a slower-growing world, pursuing economic integration and engineering a massive shift to green technologies and energy efficiency will be imperative for all countries in the region, the bank said. -- REUTERS
World Bank raises E Asia GDP forecast; sees challenges
BEIJING - The World Bank sharply raised its forecast for economic growth in East Asia to reflect reviving global demand, sustained fiscal and monetary stimulus in the region and a rapid rebound in consumer spending.
The developing economies of East Asia will grow by 8.7 per cent in 2010, the bank said in a semi-annual economic update published on Wednesday. In November, it had projected 7.8 per cent growth.
Stripping out China, growth will spurt to 5.5 per cent in 2010 from 1.3 per cent in 2009, the Washington-based lender said.
Vikram Nehru, World Bank chief economist for the East Asia Pacific region, said policymakers needed to plan for slower growth in developed countries, tighter global financial conditions, rising concerns about developed countries' debt levels, and a more difficult environment for global trade.
'In that setting, the developing countries of East Asia will need to carefully manage the withdrawal of fiscal stimulus measures in the short term while returning to their structural reform agendas to promote growth in the long term,' he said in a statement.
For China, structural reform means rebalancing the economy, including a larger role for the service sector and private consumption and moving away from investment-heavy export-led growth as well as encouraging environmental sustainability.
For middle-income countries, such as Indonesia and Thailand, the emphasis should be on investment in human and physical capital.
In a slower-growing world, pursuing economic integration and engineering a massive shift to green technologies and energy efficiency will be imperative for all countries in the region, the bank said. -- REUTERS