World Bank Notes East Asia Outpaces Global Growth Despite China Concerns
The World Bank has projected that the economic growth in East Asia and the Pacific will slow down to 4.5% in 2024, a decrease from the 5.1% growth observed in the previous year. This deceleration is primarily attributed to economic headwinds from China and prevailing policy uncertainty in the region. Despite this, Asia-Pacific remains the only region expected to experience real salary growth in 2023. Excluding China, the region is forecasted to see growth of 4.6% this year, which is a slight improvement over the 4.4% growth anticipated for 2025.
Thailand's economic growth is projected to be modest, with a 2.8% increase in 2024, followed by a potential acceleration to 3.0% in 2025. This forecast, however, represents a downward revision from previous estimates of 3.2% and 3.1% growth. Thailand's economy experienced a 1.9% expansion in 2023 but faced a contraction of 0.6% in the last quarter from the third quarter. The tourism sector and private consumption are identified as the primary drivers of Thailand's economy, with tourist arrivals expected to recover to 90% of pre-pandemic levels in the current year. In light of these challenges, Prime Minister Srettha Thavisin has called for a significant fiscal stimulus, describing the economic situation as a crisis.
Risks for the East Asia and Pacific region include the potential for a global economic slowdown, persistently high interest rates in major economies, increased uncertainty regarding economic policies, and heightened geopolitical tensions. The World Bank's update emphasizes that while the region continues to lead in growth compared to other parts of the world, it is not reaching its full potential due to these challenges.
