The World Bank has cut its growth predictions for the developing East-Asia Pacific region.
The global lender said in a report this morning that growth would reach 6.5 per cent in 2015, dropping to 6.4 per cent and 6.3 per cent in the two following years.
It had previously estimated growth of 6.7 per cent and 6.6 per cent for 2015 and 2016, respectively.
The cut in forecasts for the 14-country region, which grew by 6.8 per cent in 2014, was largely the result of economic slowdown in China – by far the biggest economy included in the group, the World Bank said. Sliding commodity prices have also played a role.
Sudhir Shetty, chief economist of the World Bank’s East Asia and Pacific Region, said: “Developing East Asia’s growth is expected to slow because of China’s economic rebalancing and the pace of the expected normalization of U.S. policy interest rates. These factors could generate financial volatility in the short term, but are necessary adjustments for sustainable growth in the long term."
China is now expected to grow 6.9 per cent this year, down from the 7.1 per cent projected six months ago. Growth predictions for the two following years have also dropped from seven per cent and 6.9 per cent to 6.7 per cent and 6.5 per cent respectively.