Growth in developing East Asia and Pacific (EAP) is expected to remain strong and hit 6.3% in 2018, but policy makers in the region need to recognize and address emerging challenges, said World Bank on Thursday.
Attending to the short-term risks associated with a faster-than-expected rise in interest rates in advanced economies and possible escalation of trade tensions will require tighter monetary policy and larger fiscal buffers, the World bank advised.
"Robust growth has underpinned the region’s tremendous gains in reducing extreme poverty. To build on this success, and improve prospects for the large share of the population who remain economically insecure, will require sustaining growth over the longer term,” said Victoria Kwakwa, World Bank Vice President for East Asia and the Pacific. “Policy makers need to focus on addressing risks to economic stability while taking steps to enhance longer-term growth potential.”
After growing faster than anticipated in 2017, China is expected to slow moderately to 6.5%in 2018 as its economy continues to rebalance away from investment and towards domestic consumption with policies that focus more on slowing credit expansion and improving the quality of growth, World Bank pointed out.
Excluding China, growth in developing EAP is expected to remain stable in 2018 at 5.4%, reflecting continued robust domestic and external demand, the organization added.
Growth in Indonesia and Thailand is expected to strengthen in 2018, with improved prospects for investment and private consumption it noted.
In the Philippines, growth is likely to remain stable in 2018, while growth In Malaysia and Vietnam is expected to ease, as public investment moderates in the former and agricultural production stabilizes in the latter after rebounding in 2017, World Bank observed.