Improved global growth prospects and continued strong domestic demand underpin a positive outlook for the developing economies of East Asia and Pacific for 2017 and 2018.
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 to expand by 6.4 percent for 2017. Growth in the region is expected to slow slightly to 6.2% in 2018 primarily reflecting China’s gradual slowdown.
The uptick in growth in 2017 relative to earlier expectations reflects stronger than expected growth in China, at 6.7%, the same pace as in 2016.
In the rest of the region, including the large Southeast Asian economies, growth in 2017 will be slightly faster at 5.1% in 2017 and 5.2% in 2018, up from 4.9% in 2016.
Over the last two decades, poverty has decreased dramatically across most of developing East Asia. Between 1990 and 2013, the number of people in the region living in extreme poverty fell by over 920 million. The rapid growth in labor incomes among the poor, along with low unemployment, public transfers (such as pensions, cash transfers, and unemployment insurance, among others), structural transformations, and public investments contributed to the decline.
Nevertheless, challenges remain. In countries such as Lao PDR and Myanmar, a significant percentage of the population remains poor, and in Mongolia and Papua New Guinea, recent economic setbacks may have reversed gains. In many countries, the public perception is that inequality is high and rising.
East Asia and Pacific is the epicenter of the double burden of stunting and obesity—both forms of malnutrition. Indonesia, Myanmar, the Philippines, and Vietnam are among a group of 34 countries accounting for 90% of the global burden of stunting, while China and Indonesia are among the 10 countries that account for more than 50% of the global burden of obesity. Stunting significantly reduces the physical and mental capabilities of children, imposing enormous human and economic costs. In Indonesia, for example, where 37% of children are stunted, economic losses associated with stunting are estimated at 2-3% of GDP.
The region includes 13 of the 30 countries that are most vulnerable to climate change. It also bears the brunt of 70% of the world’s natural disasters, which have affected more than 1.6 billion people in the region since 2000. The Pacific Island countries, where the rising sea level is threatening coastal areas and atoll islands, have been hit hard.
East Asia and Pacific is also the largest contributor to greenhouse gas emissions, accounting for one-third of the world’s carbon dioxide emissions and 60% of its coal consumption. The region plays a critical role in advancing the global climate change agenda. The World Bank is working with governments, the private sector, and other development partners on a range of innovative solutions to support greener and cleaner energy policies, including carbon pricing.
Last Updated: Oct 02, 2017