Tue, Apr 16, 2013 - Page 15 News List

World Bank cuts East Asia growth forecasts

EMERGING ECONOMIES:The global lender called on Asian governments to start reining in supportive monetary and fiscal policies, saying they could stoke inflation


The World Bank said that continued depreciation of the yen posed challenges for developed Asian countries, such as South Korea, which competed directly with Japan in many export markets.

In contrast, many developing Asian economies produced inputs used by Japanese industry. Japanese investments in these countries could increase, helping build productive capacity and boost potential output, it said.

The World Bank said that price pressures are mounting in China, although the headline rate remains under the central bank target of 3.5 percent, while inflation is building up rapidly in Indonesia.

It also sounded a warning on rising debt levels in countries such as Thailand, Malaysia and China.

While China’s general government debt stood at 22.2 percent last year, up from 19.6 percent five years ago, non-financial corporate debt has jumped to 126.4 percent of GDP from 113.6 percent in 2007. Household debt equal 29.2 percent of GDP in China, up more than 10 percentage points from 2007, the World Bank added.

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