Notwithstanding high inflation and household debt in some nations, the developing economies of East Asia and the Pacific will have faster growth in 2023 as a result of China’s openness and economic recovery, the World Bank predicted on Friday.

In a research, the Washington-based lender predicted that growth in the 23-nation region, which includes China, will increase to 5.1% from 3.5% last year.

The World Bank anticipates that China’s economy would recover to 5.1% from 3% last year as a result of its reopening, which is why the prediction was raised.

Vietnam, the Philippines, Malaysia, Indonesia, Thailand, Mongolia, and island states like Fiji, Vanuatu, and Palau are among the developing nations in East Asia and the Pacific.

It anticipates that GDP in the area, excluding China, will slow to 4.9% in 2022 from a post-COVID bounce of 5.8% as inflation and high household debt in certain nations weigh on spending.

“Most major economies of East Asia and the Pacific have come through the difficulties of the pandemic but must now navigate a changed global landscape,” said the World Bank’s vice president for the region, Manuela Ferro.

“To regain momentum, there is work left to do to boost innovation, productivity, and to set the foundations for a greener recovery.”

The lender claimed that the widening rift between China and the United States was the biggest challenge right now.

The report cited bilateral limits on technology flows and collaboration as the most critical issue, which might limit access to information globally.

“While still small compared to the advanced economies like the U.S., China has become an increasingly important source of knowledge for innovation in other East Asia and Pacific countries,” said the report.

In order to boost prosperity and participate in international accords with both China and the United States rather than being a member of a closed trade bloc, the multilateral aid organization advised countries to change their policies.

(Adapted from CNBC.com)

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