World Bank Forecasts 4.6% Growth for Developing Asia in 2024, Despite China Declines from 5.2% to 4.4%

• 14 April 2024
• Construction Focus
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The World Bank has projected a growth rate of 4.6% for developing Asia-Pacific countries, excluding China, in 2024, as outlined in their recent economic report released and updated by Asia.nikkei on 1 April 2024. Despite China’s economy moderating to 4.5% from last year’s 5.2%, trade recovery is expected to drive growth in the region, surpassing the 4.4% achieved in 2023.

Developing Asia encompasses China, Mongolia, Timor-Leste, and the 10 member states of the Association of Southeast Asian Nations (ASEAN).

The report underscores potential challenges, including trade-distorting policies in major markets like the U.S., China, Japan, and South Korea, which could impact regional trade dynamics. With a significant increase in such policies in 2023, there’s a risk of favouring companies in these countries over their Asian counterparts.

Additionally, China’s efforts to rebalance investment away from sectors like real estate towards advanced manufacturing may lead to imbalances in manufacturing capacity and demand, affecting neighbouring countries like Thailand, particularly in industries such as electric vehicles.

Moreover, the report highlights the stagnation in foreign arrivals in Asia’s tourism-dependent economies due to fewer Chinese tourists than anticipated, keeping arrivals below pre-pandemic levels.

Furthermore, potential macroeconomic shocks, such as an unexpected resurgence of inflation and higher interest rates in the U.S., could dampen industrial output growth in Developing Asia, along with internal challenges like rising private debt levels in countries like China and Vietnam.

To address these challenges and foster sustainable growth, the World Bank recommends removing barriers to competition, enhancing infrastructure, and reforming education to bridge the productivity gap between Asian enterprises and their global counterparts.

• Economy and Finance