World Bank downgrades East Asian growth forecasts due to contagion effect from China’s slumping growth forecasts


Banca March: The World Bank has updated its economic forecasts for East Asia and the Pacific in its October report. Although the regions in question have shown a recovery from pandemic levels, the association warns of slow development. While the outlook for China’s output rates in 2023 is maintained (5.1%), those for next year 2024 are down from April’s estimates (4.8% to 4.4%). Likewise, the contagion effect of the Chinese economy reduces growth expectations for the Asia-Pacific bloc (excluding China) from 4.9% to 4.7% for 2024. Among the causes responsible for this lethargy, the World Bank lists structural factors such as high debt. In this sense, non-financial corporate indebtedness has increased considerably, especially in China and Vietnam, by more than 40 p.p., reaching values of up to 160% and 100% of GDP, respectively. As a result, the figures are higher than those of developed countries, thus damaging private investments that restrict resources for the implementation of new projects.

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