World Bank forecasts East Asia Pacific to grow 5pc in 2022

WASHINGTON: The World Bank predicts that developing East Asia and Pacific countries would increase by 5 percent in 2022, despite the recurrence of the Covid-19 pandemic, tighter financial circumstances, and the Russia-Ukraine conflict.

"Shocks from the Ukraine crisis and Russian sanctions are distorting commodity supply, increasing financial stress, and reducing global development," the World Bank said in its recently issued East Asia and Pacific Economic Update, according to the source.

"The war in Ukraine is impacting on growth momentum just as the economies of East Asia and the Pacific were rebounding from the pandemic-induced shock," said World Bank Vice President for East Asia and the Pacific Manuela V. Ferro.

"The region's mainly excellent fundamentals and policies should let it weather these storms," says the source. According to the report, rising US inflation could prompt faster-than-expected financial tightening, which would be "appropriate" in the US but "too early" in many East Asian and Pacific countries where recovery is "incomplete." The prospect of capital outflows, which might put pressure on the currencies of some nations, could prompt "premature" financial tightening.

The World Bank estimates that overall economic growth in developing East Asia and Pacific countries would slow to 5 percent in 2022, 0.4 percentage points lower than forecast in October, and that growth in the region might decline to 4 percent if global conditions worsen and national policy responses are poor.

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