World Bank Raises Developing East Asia's Growth Outlook

The World Bank raised its growth projections for developing East Asia and the Pacific citing stronger than expected expansion in China and improved global prospects.

Developing East Asia and the Pacific region is forecast to grow 6.4 percent this year before moderating to 6.2 percent in 2018, the World Bank said in its East Asia Pacific Economic Update, released Wednesday.

In April, the lender had projected 6.2 percent expansion for 2017 and 6.1 percent for 2018. The region is forecast to climb 6.1 percent in 2019.

According to World Bank, stronger growth in advanced economies, a moderate recovery in commodity prices, and a strengthening of global trade growth, are the favorable external factors that will support the economies of developing East Asia and Pacific.

The World Bank projected China's economy to expand 6.7 percent in 2017 instead of 6.5 percent estimated in April.

Growth is forecast to slow to 6.4 percent next year and 6.3 percent in 2019 on gradual re-balancing away from investment and towards domestic consumption.

In the rest of the region, including the large Southeast Asian economies, growth in 2017 will be slightly faster at 5.1 percent in 2017 and 5.2 percent in 2018, up from 4.9 percent in 2016, the lender said.

The World Bank urged countries in the region to pursue structural reforms that can yield long-term economic benefits.

Further, the Washington-based lender said the financially integrated economies of Malaysia, and to a lesser degree Indonesia, Thailand, and the Philippines, remain relatively more exposed to exchange rate risk.

The bank said monetary authorities should be ready to tighten policy if warranted by the pace of interest rate increases in advanced economies.