Business & Economy

Vietnam to lead growth in Asia as China slows down: World Bank

Singapore, Sep 27 (EFE).- Vietnam is set to lead Asia’s growth in 2022 with a 7.2 percent growth rate, higher than the previous estimate of 5.3 percent, according to the World Bank’s annual growth forecast for the Asia-Pacific, which cut down its growth projection for China to nearly half.

In its report published on Tuesday, the World Bank estimates China to grow at 2.8 percent in 2022, in contrast to the 5 percent forecast it had issued in April for the world’s second largest economy.

The report includes East Asia, Southeast Asia and the Pacific islands, but excludes Japan and the two Koreas.

The deceleration of growth in China, the traditional driving force for Asia-Pacific which has continued with its debilitating “zero-Covid” policy, has slowed the region’s growth forecast for 2022 down from the 5 percent projected in April to 3.2 percent, as per the latest World Bank estimates.

Vietnam, on the other hand, would go from growing at 5.3 percent to 7.2 percent annually, according to the World Bank, whose growth prediction for Indonesia remains intact at 5.1 percent.

“The big source of growth in the region today has been the release from the restrictions that countries were obliged to maintain, either through rules or the spontaneous restraints that people exercised on consumption during the COVID period,” World Bank’s chief economist for East Asia and the Pacific, Aditya Mattoo, told Japanese media outlet Nikkei Asia.

While most of the region has reopened to tourism and has relaxed its pandemic restrictions, China continues to impose a strict Zero Covid policy that keeps it isolated from the world.

Hence, the World Bank has predicted that countries like the Philippines, Thailand and Cambodia – open to the outside world – would return back to pre-pandemic levels of production by the end of 2022, even if China continues to slow the others down.

With the exception of Laos and Cambodia, most of the region would be able to handle the United States Federal Reserve’s accelerated interest rate hikes “relatively well”, said Mattoo.

Growth in the Pacific will come mainly from Fiji, which is expected to grow at 12 percent in 2022.. EFE


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