Trade tensions to weigh on Asia-Pacific economic growth in 2019: World Bank

The World Bank has forecast lower 2019 economic growth for the Asia-Pacific region. (File photo: Shutterstock)

The World Bank on Thursday forecast lower 2019 economic growth for the Asia-Pacific region due to a prolonged US-China trade war and slowdowns in major economies.

The region is expected to grow 5.8 percent this year, compared to 6.3 percent in 2018.

Growth in China, the world’s second largest economy, is projected to ease to 6.1 percent in 2019, from 6.6 percent last year. The institution attributes this drop to a shrinking labor force, diminishing returns to investment and weak productivity growth.

To avoid US tariffs, companies have been moving their production lines out of China, but that may not benefit other economies in Asia as widely believed.

“East Asian and the Pacific countries face limited absorptive capacity due to their relatively small size and inadequate infrastructure,” said Andrew Mason, World Bank Lead Economist for East Asia and the Pacific.

As the US-China trade disputes dampen global trade, countries should focus on deepening regional integration, said World Bank, which expects growth in the Asia-Pacific region to slow to 5.7 percent in 2020 and 5.6 percent in 2021.
 

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Last Update: Wednesday, 20 May 2020 KSA 09:54 - GMT 06:54
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