World Bank sees slower growth in China, East Asia
Forecasts trimmed due to economic shift on mainland and weaker commodity prices
The World Bank yesterday lowered its economic growth forecasts for China and most of developing East Asia for this year and next year, citing slower growth in the world's most populous country as well as weaker commodity prices that have hurt exports and investments in countries such as Indonesia.
"Developing East Asia is expanding at a slower pace as China shifts from an export-oriented economy and focuses on domestic demand," the World Bank said in its "East Asia Pacific Economic Update" report.
"Growth in larger middle-income countries, including Indonesia, Malaysia and Thailand, is also softening in light of lower investment, lower global commodity prices and lower-than-expected growth of exports."
The bank now expects developing East Asia to expand 7.1 per cent this year and 7.2 per cent next year, down from its April estimates of 7.8 per cent and 7.6 per cent, respectively.
The rapid expansion of shadow banking poses serious challenges
The World Bank now expects the mainland economy to expand 7.5 per cent this year, against its April forecast of 8.3 per cent and below the International Monetary Fund's most recent forecast of 7.75 per cent.