The World Bank has cut its economic growth forecast for developing countries in East Asia due to the impact of the coronavirus’s delta variant
Excluding China’s unexpectedly strong growth, developing countries in East Asia should grow by 2.5% this year, down from a forecast of 4.4% in April, the Washington-based lender said in a report. It said China, the region’s biggest economy, should expand by 8.5%.
“The region is being hit hard by the COVID-19 Delta variant while many advanced economies are on a path to economic recovery,” the World Bank said. “COVID-19 will reduce growth and increase inequality unless the scars are addressed and the opportunities grasped.”
To prevent long-term economic damage, the bank said governments need to support productive companies and encourage new competitors, promote technology development and reduce trade barriers.
Countries also need to improve “social protection” by expanding access to “need-based assistance” for the poor, the bank said.