SINGAPORE (ICIS)--Economic growth in developing East Asia and the Pacific region is expected to slow down this year to 0.9%, the slowest pace since 1967, weighed down by the coronavirus pandemic and efforts to contain its spread, the World Bank said late on Monday.
The region’s economy expanded by 5.8% in 2019, the World Bank said.
China is forecast to post a GDP growth of 2.0% in 2020 - boosted by government spending, strong exports, and a low rate of new coronavirus infections since March, but checked by slow domestic consumption - while the rest of the region is projected to contract by 3.5%.
The world’s second-biggest economy will witness a marked slowdown in growth from a 6.1% pace in 2019 but will avoid a recession.
"Prospects for the region are brighter in 2021, with growth expected to be 7.9% in China and 5.1% in the rest of the region, based on the assumption of continued recovery and normalisation of activity in major economies, linked to the possible arrival of a vaccine," the World Bank said.
However, output is projected to remain well below pre-pandemic projections for the next two years, it said.
"Covid-19 [coronavirus disease 2019] will have a lasting impact on inclusive longer-term growth by hurting investment, human capital, and productivity," the World Bank said.
"Public and private indebtedness, along with worsening bank balance sheets and increased uncertainty, are likely to inhibit investment and pose a risk to economic stability," it added.
World Bank Economic Growth Forecasts
|Countries||2020 Forecast (%)||2019 (%)|
|Developing East Asia and Pacific||0.9||5.8|
|Developing East Asia and Pacific excluding China||-3.5||4.8|
|Papua New Guinea||-3.3||5.9|