China's reopening boosts East Asia, Pacific growth forecast

China's reopening boosts East Asia, Pacific growth forecast

PHOTO AFP Growth in the developing economies of East Asia and the Pacific will accelerate in 2023 thanks to China's reopening and economic rebound, but high inflation and household debt will weigh on consumption in some countries, the World Bank said on Friday.

The Washington-based lender said in a report it expected growth in the 23 nation region, including China, to pick up to 5.1 percent, up from its 3.5 percent growth last year.

The World Bank expects that China's reopening will help its economy rebound to 5.1 percent from 3 percent last year, which is a stronger forecast due to China's reopening.

Countries in the developing East Asia and the Pacific include Vietnam, the Philippines, Malaysia, Indonesia, Thailand and Mongolia, plus island nations like Fiji, Vanuatu and Palau.

Excluding China, it expects growth in the region to moderate to 4.9 percent from the post-COVID rebound of 5.8 percent in 2022, as inflation and elevated household debt weigh on consumption.

The World Bank Vice-President for the region, Manuela Ferro, said most major economies of East Asia and the Pacific have come through the difficulties of the epidemic but must now navigate a changed global landscape.

There is still work left to do to boost innovation, productivity and set the foundations for a greener recovery, according to Ferro.

The report also showed that China has become an increasingly important source of knowledge for innovation in other East Asia and Pacific countries.

READ MORE: World Bank: China to see strong growth

The multilateral aid agency suggested countries should reform their policies to increase growth and take part in international agreements rather than being part of an exclusive trade bloc.