East Asian economies face "substantial" near-term downside risks but will be better positioned to deal with the global economic storm if they take proper measures, the World Bank (WB) said Wednesday in its mid-year report.
East Asian countries will be in better shape amid the crisis if they can "maintain macroeconomic stability, shift exports to faster-growing regions in the world, substitute external with domestic demand and continue with structural reforms to strengthen competitiveness," the bank said. It said East Asian economies entered the global financial crisis substantially better prepared than for the 1997 Asian financial crisis.
Amid weakening export growth and reduced levels of investment and consumption, the report forecast real gross domestic product growth in East Asia will slow to 5.3 percent in 2009 from 7 percent this year.
The bank's vice president for the East Asia and Pacific region, Jim Adams, praised regional governments for "swift" and "effective" policy interventions to head off the worst impact of the global crisis.
Despite the slowdown, the bank projected East Asia will contribute about one-third of total global growth in 2008.
The World Bank expects global economic growth to ease from 4.1 percent in 2007 to 3 percent in 2008 and 1 percent in 2009.
The bank has cut its growth forecast for China in 2009 to 7.5 percent from 9.4 percent, despite massive stimulus spending. China on November 9 announced a stimulus package estimated at 4 trillion yuan (586 billion US dollars), to be spent over the next two year.
Economic growth slowed considerably during 2008. After two years with GDP growth at almost 12 percent, the pace of expansion fell to 9 percent year-on-year in the third quarter of 2008, said the report.
(Xinhua News Agency December 11, 2008)
