World Bank Warns of East Asia-Pacific Growth Slowdown in 2024

The World Bank has sounded the alarm regarding the economic growth outlook for the East Asia-Pacific region in 2024. Despite consistently outperforming global trends, the region is facing challenges that could potentially slow its growth momentum.

Aaditya Mattoo, Chief Economist for East Asia and Pacific at the World Bank, emphasized these concerns during an exclusive interview with CNBC’s “Street Signs Asia.” He noted a significant gap between the region’s current growth rates and its full economic potential.

According to the World Bank’s latest East Asia-Pacific (EAP) update for 2024, growth is expected to ease to 4.5% this year, down from the 5.1% expansion seen in the previous year. This projection holds significance given the region’s vast population, exceeding 2.1 billion people.

The report highlights China’s economic situation as a key factor contributing to the slowdown. Despite setting an official growth target of around 5% for 2024, the World Bank predicts a moderation to 4.5% growth, citing weakening consumer confidence, rising debt levels, and challenges in the real estate sector.

Moreover, the report underscores the ongoing shift in production and investment away from China, potentially impacting countries such as Vietnam and Mexico. China’s role as a crucial source of inputs and a major consumer market for the region has become increasingly pronounced.

In response to these challenges, the World Bank stresses the importance of proactive policy measures to stimulate competition, enhance infrastructure, and reform education. Additionally, the potential for China’s successful transition to sustainable growth and its engagement in open trade policies with regional partners could serve as a catalyst for economic resurgence across the East Asia-Pacific region.