A photo shows a night view of the CBD area in downtown Beijing, capital of China. [Photo/Sipa]
China’s GDP growth is forecasted to achieve 2 percent this year, mainly boosted by government spending and strong exports, and growth is expected to be 7.9 percent in 2021, the World Bank reported on Tuesday.
The economy in the East Asia and Pacific region is expected to grow by 0.9 percent this year, the lowest rate since 1967, according to the World Bank’s update forecast.
In the region, domestic economic activity is reviving in some countries that have so far contained the spread of the virus. But the East Asia and Pacific region’s economy is heavily dependent on the rest of the world, and global demand remains subdued. Output is projected to remain well below pre-pandemic projections for the next two years, the World Bank said.
Poverty in the region is projected to increase for the first time in 20 years. As many as 38 million people are expected to remain in, or be pushed back into, poverty as a result of the pandemic, based on the upper-middle income poverty line of $5.50 a day, it said in a report.
“COVID-19 is not only hitting the poor the hardest, it is creating ‘new poor.’ The region is confronted with an unprecedented set of challenges, and governments are facing tough choices,” said Victoria Kwakwa, vice-president for East Asia and the Pacific at the World Bank.
“But there are smart policy options available that can soften these trade-offs, such as investing in testing and tracing capacity and durably expanding social protection to cover the poor and the informal sector.”
The World Bank’s report called for fiscal reform to mobilize revenue through more progressive taxation and less wasteful spending. In some countries, the stock of outstanding debt might already be unsustainable and require greater external support.