Vietnam’s economy shows resilience amidst global slowdown
Staff Writer |
Growth in developing East Asia and Pacific is expected to remain resilient over the next three years, according to a new World Bank report.
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However, the region still faces significant risks to growth, and countries need to take measures to reduce financial and fiscal vulnerabilities.
Over the longer term, the report recommends that countries address constraints to sustained and inclusive growth, including by filling infrastructure gaps, reducing malnutrition and promoting financial inclusion.
The newly released East Asia and Pacific Economic Update expects China to continue its gradual transition to slower, but more sustainable, growth, from 6.7 percent this year to 6.5 percent in 2017 and 6.3 percent in 2018.
In the rest of the region, growth is projected to remain stable at 4.8 percent this year, and rise to 5 percent in 2017 and 5.1 percent in 2018. Overall, developing East Asia is expected to grow at 5.8 percent in 2016 and 5.7 percent in 2017-2018.
The report offers a comprehensive analysis of the outlook for East Asia and Pacific against a challenging global backdrop, including sluggish growth in advanced economies, subdued prospects in most developing economies and stagnant global trade.
The report expects domestic demand to remain robust across much of the region. Continued low commodity prices will benefit commodity importers and keep inflation low across most of the region.
In China, growth will moderate as the economy continues to rebalance toward consumption, services and higher-value-added activities, and as excess industrial capacity is reduced. Nevertheless, tighter labor markets will support continued growth in incomes and private consumption.
Among other large economies, 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, the report says, contingent on a pickup in public investment and the success of efforts to improve the investment climate and increase revenues.
In Malaysia, however, growth will fall sharply, to 4.2 percent in 2016 from 5 percent last year, because of weak global demand for oil and manufactured exports.
Among the smaller economies, the growth outlook has deteriorated markedly in some commodity exporters. In Mongolia, the economy is projected to grow only 0.1 percent, down from 2.3 percent in 2015, on weakening mineral exports and efforts to control debt.
Papua New Guinea will see its economic growth at 2.4 percent in 2016, down from 6.8 percent in 2015, because of declining prices and output for copper and liquefied natural gas. By contrast, growth will remain buoyant in Cambodia, Lao PDR and Myanmar. ■