World Bank raises Asian growth rate
- Source: Global Times
- [01:20 November 05 2009]
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The World Bank Wednesday raised its forecasts for Asian growth, largely due to a rebound in China driven by aggressive fiscal and monetary stimulus, but warned that a true recovery in the region was not yet at hand.
In a twice-yearly review, the Washington-based development bank revised its projection of 2009 GDP growth in East Asia to 6.7 percent from 5.3 percent and penciled in a beefed-up 7.8 percent growth next year.
But excluding China, the developing economies in the region will grow by 1.1 percent this year, picking up to 4.5 percent next year, the bank said.
That means growth in the region outside of China, despite government spending and steady performances, will be slower on average this year than in South Asia, the Middle East and North Africa.
'China's rapid growth is not only pulling the region along, (but) it is also having an impact on the global economy," said Vikram Nehru, the bank's regional chief economist.
China, now the world's largest auto market, was contributing more to global demand than either the US, the eurozone or Japan, Nehru said.
The bank accordingly jacked up its growth forecast for China this year to 8.4 percent from 7.2 percent and a further pickup in 2010 to 8.7 percent.
Nevertheless, the bank said it was too soon for Chinese and other East Asian governments to start unwinding the ultra-loose pro-growth policies they put in place to cushion the global downturn.
'The rebound has yet to become a recovery," said the bank, adding, 'That is why the authorities in the region are mindful of the risks of a premature withdrawal of stimulus, given the large output gaps and concerns that developed countries are converging to a slower-growth equilibrium."
AFP
