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China is expected to lead the recovery of East Asian and Pacific economies this year, but many nations will record sub-par growth as they struggle to emerge from the coronavirus pandemic, according to new World Bank forecasts released on Friday.
The World Bank’s latest East Asia and Pacific Economic Update predicts China’s economy will expand by 8.1 per cent in 2021, compared with 2.3 per cent the previous year, powering a 7.4 per cent region-wide expansion, up from 1.2 per cent in 2020.
Excluding China, by far the region’s biggest economy, growth will only be 4.4 per cent in East Asia and the Pacific, an improvement on a 3.7 per cent contraction the year before but still below the long-term average.
Vietnam is the other outstanding economic performer with an expected growth rate of 6.6 per cent, up from 2.9 per cent. China and Vietnam were among the relatively few countries that were only lightly hit by the pandemic and did not fall into recession in 2020.
"Like Hydra, the many-headed monster of Greek myth, COVID-19 is proving hard to suppress even a year after the first case was confirmed in Wuhan," the World Bank said.
It noted that economic growth for individual nation-states" will depend on containing the novel coronavirus; their ability to take advantage of a revival of international trade; and the capacity of governments to provide fiscal and monetary support".
"Global economic recovery, supported in part by the significant U.S. stimulus, will revive trade in goods and could provide an external boost to growth of as much as 1 percentage point on average," the report said. "But global tourism is expected to remain below pre-pandemic levels till 2023 and delay economic recovery in tourism-dependent economies."
The World Bank said "successful vaccination campaigns and early control of the pandemic, together with significant policy reform and the diffusion of new technologies" could lead to better-than-expected growth.
Slow suppression of Covid-19, however, could lead to worse-than-anticipated economic activity, increasing the risk of the emergence of new variants that could be more infectious,lethal and resistant to existing vaccines.
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