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East Asia's economic prospects bright
(Agencies)
Updated: 2004-04-20 17:27
East Asia's economies will grow nearly twice as fast as the world rate this
year on the back of China's continued strength, helping to lift millions of
people above the poverty line, the World Bank said Tuesday.
The region's expected expansion of 6.3 percent in 2004 will be the fastest
since the global economic slowdown in 2000, the multi-lateral finance agency
said in its twice-yearly East Asia economic update.
"With a strong recovery in the United States and Japan, increased demand for
East Asian exports and the long-awaited rebound in the high-tech sector, the
outlook is very positive for the big countries and for the smaller ones," World
Bank regional vice president Jemal-ud-din Kassum said.
East Asia's expected growth rate of 6.3 percent compares with a forecast of
3.7 percent globally and 4.6 percent for the United States.
China, which now accounts for around half the export growth in east Asian
economies, is again expected to remain the driving force of the region's
expansion with a 7.7 percent rise in gross domestic product this year.
The World Bank also warned, however, that there were risks for the whole
region if China's efforts to slow the nation's booming economy -- it grew by 9.1
percent in 2003, and 9.7 percent in the first three months in 2004 - resulted in
a "hard landing".
"The Chinese authorities are now aiming to eliminate
overheating by slowing growth to a more sustainable pace of around 7.0 percent.
But their task is complicated by the limited range and bluntness of
macroeconomic policy instruments available," the bank said in its report.
Nevertheless, the World Bank was optimistic that a slower growth would
be manageable in China and this would have only a modest impact on other
economies in the region.
Thailand, with a forecast growth rate of 7.2
percent, and Vietnam, at 7.0 percent, are expected to have the next fastest
growing economies in East Asia.
Rising commodity prices, partly fuelled
by China's rising appetite for raw materials, have been a big instrument in
helping the smaller economies with abundant raw materials, it said.
Prices for commodities such as cotton, rice, rubber and edible palm oils
rose by between 10 and 20 percent in 2003 and have continued to surge in the
first few months of this year, according to the World Bank.
This partly
contributed to the incomes of 49 million people in East Asia rising above the
poverty line benchmark of 2 US dollars a day during 2003.
About 674
million people in the region, about 36.7 percent of the population, are now
believed to be living on less than 2 dollars a day, down from 66 percent in
1990.
Of the 674 million people living below the poverty line, about 190
million live on less than 1 dollar a day, the World Bank said.
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