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BEIJING, Oct. 6 (Xinhuanet) -- The World Bank on Monday cut its growth forecasts for developing economies in East Asia and the Pacific, but allayed fears of a hard landing for China's slowing economy. The bank also says the outlook was clouded by possible spillovers from an expected U.S. interest rate increase.
The World Bank is holding a less optimistic view of economic growth for the East Asia Pacific region.
The multilateral lender now expects the area to grow 6.5 percent in 2015 and 6.4 percent in 2016, down from 6.8 percent growth in 2014. Both forecasts are lower than the bank's initial estimations in April.
The World Bank points out that the recovery in high-income economies remains gradual while global trade is growing at its slowest pace since 2009 and the widespread slowdown in developing countries has intensified.
The World Bank singled out China's economic rebalancing and the expected U.S. interest rate increase as key uncertainties. But it says China has sufficient policy buffers to address those risks and prevent a hard landing of the economy.
The Washington-based lender trimmed China's annual growth outlook to 6.9 percent in 2015 and 6.7 percent in 2016, down from 7.3 percent in 2014.
The lender says China's ongoing economic reforms imply a gradual reduction of growth through 2017 and is why it lowered its forecast for the country.
The World Bank also warned of a risk that markets could over-react to a Fed rate increase, causing currencies in the region to depreciate more. That may bode well for regional commodity exporters, but would also come as a huge blow to those with significant dollar debt.
The cut on the outlook for developing East Asia excluding China is steeper. The region is forecast to hold steady this year at 4.6 percent growth before expanding to 4.9 percent next year.
(Source: CNTV.cn)
