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 percent in 2021, compared with 2.3 percent the previous year, powering a 7.4 percent 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 percent in East Asia and the Pacific, an improvement on a 3.7 percent 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 percent, up from 2.9 percent. 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 wasconfirmed 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 US 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 prepandemic levels till 2023 and delay economic recovery in tourismdependent 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-the-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.
Meanwhile, annual profits at China’s industrial firms surged in the first two months of 2021, highlighting a rebound in the country’s manufacturing sector and a broad revival in economic activity from the coronavirus crisis early last year.
Profits stood at 1.114 trillion yuan ($170.31 billion) in the first two months of 2021, up 179 percent from the same period last year when the COVID-19 pandemic paralyzed economic activity, data from the National Bureau of Statistics (NBS) showed on Saturday.
