asia

East Asia and Pacific economy to expand 7.4% in 2021 – World Bank


SINGAPORE (ICIS)–Economic growth in east Asia
and the Pacific is projected at 7.4% in 2021,
reversing an estimated contraction of 0.9% in
2020, led by a strong rebound in China, the
World Bank said late on Tuesday.

Despite a recovery in domestic and global
demand, regional activity is expected to remain
somewhat relatively subdued, reflecting lasting
damage caused by the coronavirus pandemic, it
said in its latest Global Economic Prospects
report.

Global economic output is expected to expand by
4% in 2021 before moderating to 3.8% in 2022,
after shrinking by 4.3% in 2020, based on World
Bank’s projections.

Growth in China is projected to accelerate to
7.9% in 2021 – one percentage point above the
World Bank’s growth forecast in June last year
– reflecting release of pent-up demand and
a quicker-than-expected resumption of
production and exports.

For the rest of the east Asia & Pacific
region, the recovery is expected to be more
protracted.

Following last year’s contraction, output in
the region excluding China is expected to
expand by 4.9% in 2021 and 5.2% in 2022, to a
level around 7.5% below pre-pandemic
projections.


Downside risks to the outlook include the
possibility that the pandemic and its effects
last longer than expected; the long-term damage
from last year’s recessions is greater than
expected; balance sheet stress intensifies; or
the contraction in global trade is sharper and
longer lasting, including because of a
re-escalation of trade tensions.

“On the upside, the rapid deployment of highly
effective vaccines could trigger a faster- and
stronger-than-expected rebound in major
economies and global demand,” the World Bank
said.

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“Even with social distancing, universal
masking, and other pandemic-control measures,
additional waves of contagion will remain a
risk until widespread immunity or effective
vaccination is achieved,” it added.

In China and Vietnam, which both have kept new
infections at a low rate, GDP is estimated to
have expanded by 2 and 2.8%, respectively, in
2020.

Growth in these two countries has been
supported by quick and sustained resumption of
production and exports, with additional boosts
from stimulus-fueled public investments,
and resilient foreign direct investment in
Vietnam.

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