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East Asia and Pacific Economic Data Monitor (October 2012)

October 8, 2012

  • Growth in the East Asia and Pacific region may slow down by a full percentage point from 8.2% in 2011 to 7.2% this year, before recovering to 7.6% in 2013.
  • Weak exports and lower investment growth will cut down China’s GDP growth from 9.3% in 2011 to 7.7% this year, but is expected to rebound to 8.1% in 2013.
  • Growth in developed countries will remain modest, with recovery in the region to be driven mainly by strong domestic demand in developing countries
  • Poverty in the region will continue to decline, with the share of people living on $2 a day expected to reach 24.5% by the end of 2013, down from 28.8% in 2010.
  • Tensions in the Eurozone have eased following the European Central Bank’s announcement to defend the euro in July and the launch of its bond-buying program, but a crisis in the Eurozone will adversely affect regional economies mainly through trade and links to the financial sector. 
  • Food price increases are less of a risk for East Asia at this stage, as rice markets remain well supplied. 
  • The East Asia and Pacific region’s share in the global economy has tripled in the last two decades, from 6% to almost 18% today, which underscores the critical importance of this region’s continued growth for the rest of the world.
  • Policy makers in the East Asia and Pacific Region need to continue managing growth and reducing poverty in an environment that will remain volatile.
  • Countries that have experienced rapid expansion of credit need to be cautious, while exporters of commodities should continue to take measures and build institutions that help manage volatile commodity revenues.
  • Over the medium-term, increases in productivity in the East Asia and the Pacific, which is increasingly becoming a middle income region, will drive growth.
  • Continued structural reforms, improvements in the business climate and investments in infrastructure and education systems will become more important.