The Economies of Asian countries are not doing as well as they were doing before the pandemic, with the region’s economic growth slowing to 4.5 percent this year from 5.1 percent in 2023, the World Bank said in a report of East Asia and Pacific (EAP) Outlook on Monday.
Debt, trade barriers and political uncertainty is undermining the region’s economy, the report said, dynamics and governments must do more to address long-term problems such as weak social safety nets and underinvestment in education.
Asian economies is growing slower than before the pandemic but faster than the part of the world.
“This report demonstrates the region is outperforming much of the rest of the world, but it’s underachieving its own potential,” Aaditya Mattoo, the World Bank’s chief economist for East Asia and the Pacific, said in an online briefing.
“The leading firms in the region are not playing the role that they should,” he aadded.
China expected to have 4.5 to 5.2
The World Bank forecast the growth in China is projected to moderate to 4.5% to 5.2% in 2023. as high debt, a weak property sector, and trade frictions weigh on the economy.
But the China ruling Communist Party has set an official target for about 5% growth this year just below the 5.2% annual pace of last year.
Mattoo said Beijing still has a way to go in shifting its economy away from reliance on real estate construction to drive business activity, and just spending more money won’t fix the problem.
Matto said Beijing still has a long way to go to transform its economy away from building real estate to promote trade, and simply adding more money will not solve the problem.
“The challenge for China is to choose effective policies.” he said. “Fiscal stimulus will not correct structural imbalances,” he said. We need stronger Social Security and other programs that allow households to spend more, which increases demand, which encourages businesses to invest.
Vietnam
Vietnam, as a preferred destination for foreign manufacturers, attracts a huge amount of foreign investment, but its growth rate of about 5% is below its potential.
Vietnam’s 5% growth rate is gratifying. It is a kind of underachievement, which should not be cheered,” Matto said in an online press conference.
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