East Asia & Pacific GDP growth to slow to 5.0% on Ukraine war – World Bank

SINGAPORE (ICIS)–Economic growth in east Asia and Pacific countries this year will slow down this year amid the Russia-Ukraine war, which is pushing up global energy prices.

The World Bank cut its GDP growth forecast for the region to 5.0%, the multinational institution said in its April report titled “Braving the Storms” released on 4 April.

“The [Ukraine] war comes on top of the economic distress caused by the lingering COVID-19 pandemic, the financial tightening in the United States, and the pandemic resurgence amidst zero-COVID policies in China,” the World Bank said.

“If global conditions worsen and national policy responses are weak, growth could slow to 4 percent,” it added.

Economic expansion in China is projected to slow to 5.0%, while that of the southeast Asian five (Indonesia, Thailand, Malaysia, the Philippines and Vietnam) will weaken to 4.9%, based on the report.

Source: World Bank April 2022 report

China, the world’s second biggest economy, accounts for 86% of regional output. Its growth could slow further to 4%, based on the World Bank’s downside scenario.

“Shocks emanating from the war in Ukraine and the sanctions on Russia are disrupting the supply of commodities, increasing financial stress, and dampening global growth,” it said.

Most economies are in a recovery phase following a coronavirus-driven slump in 2020.

“In the downside scenario, 6 million more people in the region would remain trapped in poverty in 2022 at the US$5.50/day poverty line,” the World Bank said.

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