WB report predicts economic growth of 7.3 percent for Emerging East Asia

Emerging economies in East Asia will see growth slow to a more modest 7.3 percent this year, according to a six-monthly report released Thursday by the World Bank on the region's economic and social health.

The region, including China, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, the Republic of Korea, Hong Kong and China's island province of Taiwan, posted a combined economic growth of 8.1 percent in 2006, the strongest in the past 10 years.

The report says that after the financial woes of 1997, regional output levels have doubled, poverty rates have been halved and foreign reserves boosted to two trillion U.S. dollars.

But with the successes comes a new wave of challenges for countries that are endeavoring to avoid the "middle-income trap", the report points out.

Milan Brahmbhatt, the report's principal author and lead economist for the World Bank's East Asia and Pacific region, said that the "middle-income trap" describes the situation in which countries are able to move up from low income to middle income but do not have the strategies in place to allow them to climb into the high income zone.

"Historically, few countries have mastered the complex technical, social and political challenges that arise," Brahmbhatt said.

The report predicts that by 2010, more than nine in 10 east Asian nations and regions will have achieved middle income economies. To move out of the middle-income trap, a key challenge is maintaining high growth in a sustainable way. In China, this means new strategies to tackle severe environmental problems and other stresses and imbalances that have emerged during the last 20 years of very rapid growth, according to the report.

Source: Xinhua