World Bank tips China to lead growth in Asia region

The World Bank has lifted its growth forecasts for China’s economy, while downgrading most other countries in the region.

The World Bank’s East Asia and Pacific Fall 2021 Economic Update released on Monday, projects China’s economy will expand by 8.5% in the second quarter of FY21.

This compares to the rest of East Asia and the Pacific, in which economic growth is projected to come in at 2.5%. A 2% drop on the World Bank’s previous forecast for the region in April 2021.

“The economic recovery of developing East Asia and Pacific faces a reversal of fortune,” said World Bank Vice President for East Asia and Pacific Manuela Ferro.

“Whereas in 2020 the region contained COVID-19 while other regions of the world struggled, the rise in COVID-19 cases in 2021 has decreased growth prospects for 2021.

“However, the region has emerged stronger from crises before and with the right policies could do so again.”

The resurgence and persistence of COVID-19 has been the biggest impediment to growth.

The report notes COVID-19 has hit poorer households hardest and they are more likely to lose income, suffer greater food insecurity, have children not engaged in learning, and make distress sales of scarce assets.

However, the World Bank says accelerated vaccination and testing to control COVID-19 infections could revive economic activity in struggling countries as early as the first half of 2022, potentially doubling their growth rate next year.