World Bank sees better economic growth in East Asia

The World Bank says it has seen better growth in the East Asia and Pacific (EAP) region this year, partly due to stronger than expected growth in China.

The bank said in its latest East Asia and Pacific Economic update that it had revised the region's gross domestic product (GDP) growth forecasts up 0.2 and 0.1 percentage points to 6.4% and 6.2% respectively for 2017 and 2018.

Sudhir Shetty, the bank's chief economist for East Asia and Pacific region, said via video-link that the growth of EAP is expected to remain strong in the near term, partly because of China's economy, which is likely to grow at 6.7 percent this year, the same pace at 2016.

Due to better-than-expected performance in the first half, the bank had upgraded China's 2017 and 2018 economic growth forecasts by 0.2 and 0.1 percentage points to 6.7% and 6.4% respectively.

China's GDP grew 6.9% year-on-year in the first half, underpinned by consumption and improving external conditions.

The growth in China, however, is projected to moderate in 2018 and 2019 to around 6.4 percent, as the economy rebalances away from investment and external demand towards domestic consumption over the medium term, according to Shetty.

Besides, the Chinese government is expected to continue to pursue policies aimed at bringing the growth of debt under control to reduce macroeconomic risks and imbalances.

Such risks may include the possibility of more restrictive trade policies and renewed strains on the financial sector associated with the withdrawal of accommodative monetary policies in advanced countries.

In the rest of the region, including large Southeast Asian economies, growth in 2017 will be slightly faster at 5.1 percent in 2017 and 5.2 percent in 2018, up from 4.9 percent in 2016, Shetty said.

"Overall, improved global growth prospects and continued strong domestic demand underpin a positive outlook for the developing economies of EAP," he said.

Shetty said, the growth momentum in the region is facing some potential risks, which include rising trade protectionism and geopolitical tensions. - NNN-Xinhua