Momentum of Growth Slows in East Asia

China's weakness, caused by high debt, an ailing property sector and an aging population, is dragging down growth projections in the region of developing East Asia-Pacific, according to the World Bank. While GDP growth is expected to improve in the region in 2023 and 2024, the projections are far below the pre-crisis level of around 6 percent, at just 5.0 percent and just 4.5 percent, respectively. The latter figure would be the lowest growth outside of acute crisis years in almost 50 years.

Developing East Asia and the Pacific have taken major hits economically due to the coronavirus pandemic and later the invasion of Ukraine that caused another global crisis - in the region mostly affecting China. Several other economies in Asia indeed registered strong bounce-back growth as a response to the pandemic in 2022. Due to China's outsized influence, developing economies in East Asia-Pacific grew by just 3.4 percent in 2022, however, down from 7.5 percent in 2021, but up from 1.3 percent in 2020.

At just 4.4 percent projected GDP growth in 2024, China would line up behind Indonesia, the Philippines, Vietnam and Cambodia that year. Still behind it is Thailand, whose economy is heavily dependent on tourism and hasn't recovered fully from Covid-19 yet. Excluding China, growth in East Asia-Pacific is projected to stagnate rather than slump at 4.6 and 4.7 percent in 2023 and 2024, compared to 5.8 percent growth in 2022 and 4.8 percent in 2019. While in the latter year, China was still pulling the regional average up, this is projected to reverse starting in 2024.