Economy

World Bank: China to drive Asian growth

(Agencies)
Updated: 2011-01-13 09:46

BEIJING - China's rapid growth should slow to 8.5 percent this year from 10 percent in 2010 but the world's second-largest economy will remain the focus of Asia's expansion, the World Bank said Thursday.

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In a report on the global outlook, the bank said overall growth for developing Asian economies should ease to 8 percent from last year's 9.3 percent as exports moderate and governments rein in credit to cool inflation pressures.

China's growth is easing as Beijing winds down its stimulus and tightens credit to cool inflation and surging housing prices, the bank said. Still, it said continued strong Chinese demand for raw materials and components should buoy exports by its Asian neighbors.

"East Asia is well positioned to enjoy further years of strong _ albeit more moderate _ growth over the period to 2012," the Washington-based bank said. "China will remain the focal point of regional activity."

The bank's forecasts for developing economies in East Asia and the Pacific include China, Indonesia, Thailand, Vietnam, the Philippines, Malaysia and Pacific Island nations Fiji and Vanuatu.

Many economies are trying to rein in high or rising inflation, with hikes in food prices especially acute, the bank said. It said prices of staple foods might climb further if investors start buying more commodities in hopes of earning higher returns at a time of low interest rates in the West.