Published on : Oct 05, 2015
The World Bank has made a cut into its growth forecast for Asia Pacific region for FY 2015-16, owing to the severe risks, which the steep downturn in the Chinese economy and rising interest rates from the U.S. pose.
According to the new estimation, the East Asia Pacific region is expected to witness a growth rate of 6.50% in 2015 and 6.40% in 2016. Earlier, the bank had predicted a growth rate of 6.70% for this region.
The recent most estimate by the World Bank is even lower than the previous year’s growth rate of 6.80%. Some of the key development banks across the globe have recently modified their forecasts for growth of the Asia Pacific region. For instance, in Sep 2015, the Asian Development Bank has stated that the decelerating growth in Chinese economy would lower the growth rate to 5.80% for this Asian economy.
Apart from this, the International Monetary Fund also issued a statement saying that the economic slowdown in second largest economy of the world is posing a serious threat to the global economy.
The regional chief economist of the World Bank, Mr. Sudhir Shetty, stated that the growth of the emerging economies in East Asia growth is likely to slow down because of the economic rebalancing in China and the speed of the projected normalization of the policy interest rates in the U.S.
If the growth rate for Chinese economy continues to decline, the whole Asia Pacific region would be impacted significantly. Countries connected to China through investment, trade, and tourism would face a strong blow, added Mr. Shetty