Growth in developing East Asia will decline by around one to two percentage points to around 8.5% in 2008 as a result of the unfolding financial turmoil in the US and the resulting global slowdown, says the World Bank’s latest six-monthly review of the East Asia and Pacific region’s economies.
But despite the likely drop from recent double-digit levels, overall growth remains healthy across the region and most countries are well positioned to navigate the global slowdown because of the investments they’ve made in the last 10 years in structural reforms and putting sound macroeconomic policies in place, the report says.
With the slowdown of the US economy, what spillover effects will it have on East Asia and the Pacific? With China as a powerful regional locomotive, has the region "decoupled" from the US economy? Will the region’s economic fundamentals be strong enough to help it weather the volatility? With its large reserves, could the region withstand further shock if the financial situation in the US worsens? These are some of the questions addressed in the report.