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Tuesday, Oct 29th

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You are here: Economy News World Bank cuts East Asia-Pacific GDP growth, signs of China's further economic downturn

World Bank cuts East Asia-Pacific GDP growth, signs of China's further economic downturn

World Bank cuts East Asia-Pacific GDP growth

The World Bank on Monday cut down the economic growth forecast by around 7.2% and it was also noticed that the Asian stocks fell. The main reason behind Asian stocks felling was the European markets which are suffering through stagnant economic conditions. The Bank slashed down GDP growth forecast for the entire East Asia-Pacific region and has estimated about the signs of China as well, being at risk. According to the bank, the economic conditions in China could worsen in coming days, and it would be more than the economists have anticipated.

It has been noticed that, among other regions in Asia-Pacific, China is the region experiencing more afflictions. According to the World Bank Chief Economists, the country is suffering from these difficulties due to growing domestic demands and weaker exports. As according to the latest Data Monitor of East Asia-Pacific region, it can be concluded that, China's economic slowdowns may accelerate causing more aggravations. Though many local governments of China are announcing various investments plans, World Bank said that those aspiring to obtain funding for investments could face certain money constraints.

Being the second largest economy in the world and growing at a considerable rate since 30 years, China has been the largest exporter and second largest importer in the world. China became the 2nd largest economy of the world in 2010 and even the economic growth rate of the country was considerably high. Many economists predicted that China would probably become world's largest economy in 2020. Nevertheless, China noticed signs of slowdown in the economy 2011 onwards. Due to growing labor and domestic demands and similar other factors, the country gradually started to face stringent economics. One of the major reasons why China is facing aggravations is the global economic downturn. Many of its major export markets suffered through tight economic conditions, thereby making China suffer through the same. At present, many of the economists predict that, there are possibilities of China, facing more economic trouble in coming days.

On the other hand, World Bank has predictions that, China's economy may acquire pace in 2013. Moreover, this growth would be supported by fiscal policy measures which were introduced earlier in 2012. On contrary, the international lender has estimated that the developing countries in East Asia-Pacific will grow by 7.2% in 2012 and 7.6% in 2013 which are numbers relatively less than the previously estimated ones. The bank cut down its growth forecast in some parts of Africa from 5.2% to 4.8% and in Latin America from 4% to 3% solely due to the global economic downturn.

It has been noticed that, in East and Asia-Pacific regions, the GDP growth rate noted is the slowest since 2001 and to the worst, even the least than that seen at peak of the financial crisis in 2009. The World Bank has made certain predictions on the GDP growth rate of these developing economies. But with such delicate scenario of global economy, monetary conditions of these regions would continue to slowdown for certain time span.