World Bank cuts Asia growth forecast
5 October 2015, Nirapad News: The World Bank (WB) has cut its growth forecast for the Asia Pacific region for this year and next, because of the risks posed from a sharp slowdown in China and raising US interest rates.
The bank now expects growth in developing East Asia and the Pacific to be 6.5% this year and 6.4% in 2016, down from an earlier forecast of 6.7%.
The latest estimate is even lower than growth of 6.8% last year.
Major development banks have recently revised lower their growth forecasts, reports the BBC.
Last month, the Asian Development Bank (ADB) said slowing growth in China would drag down the developing region’s growth to 5.8% this year.
The International Monetary Fund (IMF) also flagged in September that slowing growth in the world’s second largest economy posed a threat to the global economy.
‘Developing East Asia’s growth is expected to slow because of China’s economic rebalancing and the pace of the expected normalization of US policy interest rates,’ said the World Bank’s regional chief economist Sudhir Shetty in a statement on Monday.
‘If China’s growth were to slow further, the effects would be felt in the rest of the region, especially in countries linked to China through trade, investment and tourism.’
East Asia accounts for almost two-fifths of the world’s economic growth, according to the World Bank.