According to the World Bank report, the economic growth in East Asia and the Pacific region has been hit due to China’s slowdown.
The World Bank on Tuesday, September 27, lowered the growth forecast of the region to 3.2%, down from 5% in April.
The bank cut China’s growth forecast for this year to 2.8%, much lower than the 5% projected growth in April. China accounts for 86% of the economic output of the region.
Reuters cited the World Bank’s report, saying that the lower forecast was due to a sharp economic slowdown in China as a result of its strict zero-COVID measures. Beijing’s stringent COVID policy has disrupted the country’s industrial production, domestic sales, and exports.
Multiple financial institutions have repeatedly kept lowering their forecast for China’s 2022 growth, reflecting a dim outlook for China’s economy.
Goldman Sachs cut its previous projection for China’s economic growth next year from 5.3% to 4.5%.
In addition to COVID control measures, Goldman Sachs economists cited the real estate crisis and the power shortage due to high temperatures and droughts for the forecast cut.
The Asian Development Bank last week also downgraded China’s growth forecast for 2022 from 5% to 3.3%. In contrast, its forecast for the rest of developing Asia is 4.3%, reflecting that China’s growth lags behind emerging Asian countries for the first time in over three decades.
China’s economy grew only 2.5% in the first half of 2022, while its official target is 5.5% for the year.