# East Asia and the Pacific Region to Maintain Growth Despite Global Challenges

- Link: https://www.thailand-business-news.com/economics/134119-east-asia-and-the-pacific-region-to-maintain-growth-despite-global-challenges
- Published: 2024-04-01T21:24:40+07:00
- Author: Zaw Win Maung

Developing East Asia and Pacific is growing faster than the rest of the world but
slower than it was before the pandemic, the World Bank said on Sunday in its semi-
annual economic outlook for the region.

While recovering global trade and easing financial conditions will support economies
in the region, increasing protectionism and policy uncertainty will dampen growth.

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## Key Takeaways

 * The East Asia and Pacific region is projected to sustain growth at a rate of 
   4.5% in 2024, despite global economic headwinds.
 * Addressing the productivity slowdown among leading firms in the region is crucial
   for long-term economic growth, especially in digital-intensive sectors.
 * To boost productivity and sustain growth momentum, the region needs to prioritize
   opening activities to private sector investment, resolving financial sector challenges,
   and investing in human capital and infrastructure.

_“While growth in per capita incomes in the East Asia and Pacific region has surpassed
most other developing economies in recent decades, it has been driven by investment
rather than productivity growth,”_ said **World Bank East Asia and Pacific Chief
Economist Aaditya Mattoo. **_“Bold policy action to unleash competition, improve
infrastructure, and reform education could revitalize the region’s economy.”_

Regional growth is projected to ease to 4.5% in 2024 from 5.1% last year, the World
Bank’s _[East Asia and Pacific April 2024 Economic Update](http://hdl.handle.net/10986/41211)_
says. Growth in developing East Asia and Pacific excluding China is projected to
pick up to 4.6% this year, up from 4.4% in 2023.

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Growth in China is projected to moderate to 4.5% from 5.2% in 2023, as high debt,
a weak property sector, and trade frictions weigh on the economy. Among Pacific 
Island countries, growth is forecast to slow to 3.6% in 2024 from 5.6% last year
as the post-pandemic rebound dissipates. The slowdown partly reflects normalization
of growth in Fiji to 3.5% in 2024 from an exceptionally strong 8% last year.

“_The East Asia and Pacific region is making a strong contribution to world economic
growth, even as it faces a more challenging and uncertain global environment, aging
population and the impacts of climate change,” _said **World Bank East Asia and 
Pacific Vice-President Manuela V. Ferro.**

> _“Countries of the region can sustain their growth momentum by accelerating the
> opening of more activities to private sector investment, resolving financial sector
> challenges, and boosting productivity.”_
> **World Bank East Asia and Pacific Vice-President Manuela V. Ferro**

The outlook is subject to downside risks, which include a greater than expected 
slowdown in the global economy, higher for longer interest rates in major economies,
increased uncertainty around the world about economic policies, and an intensification
of geopolitical tensions.

A Special Focus section of the report presents evidence that productivity growth
among leading firms in the region has lagged that of leading global companies. The
gap is especially stark in digital-intensive sectors.  Because new technologies 
typically gain traction first among leading firms and cascade later to other businesses,
this trend raises concern across the business spectrum.  

Impediments to competition, uneven worker skills and weak management contribute 
to lagging productivity growth among firms. Opening goods and services to greater
competition and enhancing human capital – through investments in teachers and in
tertiary education – can help increase productivity.