World Bank Upgrade East Asia Growth Despite U.S. Slow Down

East Asian economies are likely to remain robust in 2008 despite growing concerns about the U.S. sub-prime crisis and increasing global oil prices, says the World Bank’s latest East Asia & Pacific Update.

The Update – a six-monthly report on the region’s economic and social health – finds that growth in emerging East Asia¹ is expected to exceed 8 percent in 2007 for a second year in a row and to moderate only slightly in 2008. Although East Asian exports to the US have already slowed, more buoyant investment and consumption in China and other countries have allowed growth to remain strong and even pick up this year.

China is expected to grow by 11.3 percent in 2007 and that is expected to slow only modestly to 10.8 percent in 2008. The stronger growth dynamic extends to middle-income economies in South East Asia and continues to run at solid 7 percent to 10 percent rates in low-income economies of the region including Cambodia, Lao PDR, Mongolia and Vietnam. Growth is also running at above historical trends in some of the small Pacific Island economies due to high commodity prices although social tensions and political instability continue to undermine performance in some of these countries.