The latest World Bank Report for East Asia and Pacific, 2016-2018, suggests that growth in the region will remain resilient over the next three years, but that in the longer term there are significant risks, and countries need to take measures to reduce financial and fiscal vulnerabilities.
In particular, the Report recommends that countries address constraints to sustained and inclusive growth, by filling infrastructure gaps, reducing malnutrition and promoting financial inclusion.
For Thailand, the World Bank forecasts growth at 3.1% in 2017 and 3.3% in 2018, following accelerated growth in private consumption over the first half of 2016. Investment is growing at a pace comparable to 2015, although net foreign direct investment (FDI) flows are diminishing.
In the rest off the region, domestic demand remains buoyant, fueled by internal stimuli and accommodative monetary policy. In China, growth will moderate as the economy continues to rebalance toward consumption, services and higher-value-added activities, and as the excess of industrial capacity is reduced. Elsewhere, it is expected that Malaysia, the Philippines, and Vietnam will benefit from positive FDI flows. Prospects are strongest in the Philippines, where growth is expected to accelerate to 6.4 percent this year, and Vietnam, where growth this year will be dented by the severe drought, but will recover to 6.3 percent in 2017. In Indonesia, growth will increase steadily, from 4.8 percent in 2015 to 5.5 percent in 2018
In summary, Victoria Kwakwa, World Bank Vice President for East Asia and Pacific commented:
“The outlook for developing East Asia and Pacific remains positive, with weakness in global growth and external demand offset by robust domestic consumption and investment.
The long-term challenge is to sustain growth and make it more inclusive, by shrinking gaps in income and by providing access to public services, especially in China; improving infrastructure across the rest of the region; reducing persistent child malnutrition; and harnessing the potential of technology to stimulate financial inclusion.”
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