World Bank: Growth in Developing East Asia Strong, but Slowing

Posted May 23rd, 2012 at 3:15 am (UTC-5)
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The World Bank says growth in East Asia's developing economies remains strong, but warns they need to reduce their reliance on exports as the global economic slowdown continues.

The Washington-based lender said in a biannual report Wednesday that it expects growth to slow to 7.6 percent this year in developing East Asia, which excludes Japan. That is down from 8.2 percent in 2011.

The report said global demand was likely to remain weak because of the uncertainty of the European debt crisis and a sluggish U.S. recovery. The European Union, U.S., and Japan make up more than 40 percent of the region's exports.

While it said most East Asian economies were well-positioned to handle further external shocks, it said governments should do more to decrease their reliance on trade and find more ways to encourage growth and domestic demand.

The bank said poverty continues to fall in East Asia. It predicts the number of people living on less than $2 a day will decrease by 24 million this year. But it estimates that about one-third of the region still lives in poverty.

Developing East Asia is growing despite a quicker than expected slowdown in China's economy. The World Bank predicted that China's economy – the world's second largest – will expand 8.2 percent in 2012, down from 9.2 percent in 2011.

Excluding China, the bank expects growth in the region to increase to 5.2 percent this year, up from 4.3 percent in 2011. The bank attributes that growth to a rebound in exports in Southeast Asia, which was hit by massive floods at the end of last year.

The World Bank defines developing East Asia as China, Cambodia, East Timor, Fiji, Indonesia, Laos, Malaysia, Mongolia, Papua New Guinea, the Philippines, the Solomon Islands, Thailand, and Vietnam.