The World Bank has raised its growth projections for East Asian and Pacific economies, citing a rebound in Chinese activity as well as the notion that the region has been largely unaffected by the impacts of global banking pressures.
The World Bank raised its growth forecast for the region from 4.6% to 5.1% for 2023 in its latest report.
In terms of China’s economy, World Bank forecasts for 2023 have been increased from 4.5% to 5.1% annual growth.
The report stated, “The forecast assumes a pro-growth alignment of public health, regulatory, and macroeconomic policy in China,” with the expectation that inflation will increase to 2.6% in 2023 from 2% in 2022 as a result of a rebound in domestic consumption.
The World Bank noted that while the East Asian and Pacific banking sector “has not so far been impacted,” there are “potential risks through direct or indirect exposure to losses” due to the turmoil in the United States and Europe.
Most countries in the region have low non-performing loans and sufficient overall capital levels, according to publicly available indicators, the World Bank said. The East Asia and Pacific region’s financial system is healthy so far.
