World Bank cuts growth forecast for East Asia and the Pacific for 2022

6 Apr 2022 , 12:26 PM

The World Bank on Monday has cut its growth forecast for East Asia and the Pacific for 2022 to reflect the economic impact of Russia’s invasion of Ukraine, warning the region could lose further momentum if conditions worsen.

Overall economic growth is projected to slow to 5 per cent in 2022– 0.4 of a percentage point less than expected in October. If global conditions worsen and national policy responses are weak, growth could slow to 4 per cent.  China, which accounts for 86 per cent of regional output, is projected to grow 5 per cent in the baseline and 4 per cent in the downside scenario. 

Output in the rest of the region is projected to expand 4.8 per cent in the baseline and 4.2 per cent in the downside scenario.  In the downside scenario, 6 million more people in the region would remain trapped in poverty in 2022 at the US$5.50/day poverty line.

The war in Ukraine threatens the uneven recovery of developing East Asia and Pacific (EAP) countries from the COVID-19 shock, the World Bank said on Monday. The war comes on top of the economic distress caused by the lingering COVID-19 pandemic, the financial tightening in the United States, and the pandemic resurgence amidst zero-COVID policies in China.

“Just as the economies of East Asia and the Pacific were recovering from the pandemic-induced shock, the war in Ukraine is weighing on growth momentum,” said World Bank Vice President for East Asia and Pacific Manuela V. Ferro. “The region’s largely strong fundamentals and sound policies should help it weather these storms,” he added.