WB Sees Vietnam Beating China As Asia's Growth Leader

The World Bank (WB) has downgraded its annual growth forecast for the Asia-Pacific, a region buoyed by Vietnam's 7.2% expansion this year but not enough to offset China's slowing economy, Francesca Regalado reported for Nikkei Asia.

Photo Insert: The Asia-Pacific region was buoyed by Vietnam's 7.2% expansion this year.

In its latest economic forecast published Tuesday, the bank sharply downgraded China's growth to 2.8% from 5% in April. That slowed the region's forecast expansion to 3.2% for this year, down from the 5% growth projected in April.

The report covers East Asia, Southeast Asia, and the Pacific islands, but excludes Japan and the two Koreas. WB noted that for the first time in 30 years, emerging Asia is growing much faster than China.

Not to be outdone, the Asian Development Bank (ADB) also revised the growth projections published in April 2022, saying this year’s economic growth would be 4.3% but would rise to 4.9% for next year.

Inflation in developing Asia, while remaining lower than elsewhere in the world, is increasing amid higher energy and food prices. The regional inflation forecast is raised to 4.5% for this year and 4.0% for next year.

Several downside risks loom large. A sharp deceleration in global growth, stronger-than-expected monetary policy tightening in advanced economies, the Russian invasion of Ukraine escalating, a deeper-than-expected deceleration in the People’s Republic of China (PRC), and negative pandemic developments could all dent developing Asia’s growth, ADB warned.

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