WASHINGTON — China’s economy will grow by just 2.8 per cent this year, compared to 8.1 per cent in 2021.

“China, which previously led recovery in the region, is projected to grow by 2.8 per cent in 2022, a sharp deceleration from 8.1 per cent in 2021,” reported Sputnik quoting the World Bank.

For the entire East Asia and the Pacific region, the growth is projected to slow to 3.2 per cent this year from 7.2 per cent in 2021, before accelerating to 4.6 per cent next year, the bank added.

World Bank regional Vice President Manuela Ferro acknowledged that most economies are demonstrating recovery.

However, she warned, they should be ready for a slowing global growth and should address domestic policy distortions that are an impediment to longer-term development.

Recovery in domestic demand became the major driver for the growth in most of the region, the bank noted.

“The global economic slowdown is beginning to dampen demand for the region’s exports of commodities and manufactured goods. Rising inflation abroad has provoked interest rate increases, which in turn have caused capital outflows and currency depreciations in some East Asia and Pacific countries,” the bank said.

These developments have increased the burden of servicing debt and shrunk fiscal space, hurting countries that entered the pandemic with a high debt burden, it added.

World Bank East Asia and Pacific Chief Economist Aaditya Mattoo warned that policymakers have to make a tough choice between curbing inflation and supporting economy.

“Controls and subsidies muddy price signals and hurt productivity. Better policies for food, fuel, and finance would spur growth and insure against inflation,” he said.


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