Asian economies are expecting to continue slowing according to the latest report of the World Bank. This is bad news for tourism in the region which could experience a drastic slowdown in foreign visitors’ arrivals in 2020.
The latest report from the World Bank is less optimistic than previous ones over the perspective of Asian economies. Although growth is still continuing on the continent, the bank sees a serious slowdown in the growth rate. The World Bank talks of economic forecast in the regiont to slip to 5.8 per cent in 2019 from 6.3 per cent in 2018.
The slowing down trend is due uncertainty around US-China trade tensions and slowdowns in major global economies could further hurt the region’s exports, the World Bank report stresses.
The report highlights the weakening global demand and heightened uncertainty that led to a decline in exports and investment growth, and points out that increasing trade tensions pose a long-term threat to regional growth.
Countries with proximity to China as manufacturing centres will see limited benefit in the short term as trade tensions and global uncertainties intensify, the World Bank said.
“While companies are searching for ways to avoid tariffs, it will be difficult for countries in developing East Asia and the Pacific to replace China’s role in global value chains in the short term due to inadequate infrastructure and small scales of production,” said Andrew Mason, World Bank Lead Economist for East Asia and the Pacific.
China’s growth is projected to slow to 6.1 per cent this year, down from 6.6 per cent in 2018, the report said.
For the long term, the World Bank said the ongoing US-China trade dispute will increase the need for countries in the region to use fiscal or monetary measures to help stimulate their economies and undertake regulatory reforms to improve trade and attract investment.
The World Bank said that growth for East Asia and the Pacific is expected to slow to 5.7 per cent in 2020 and 5.6 per cent in 2021.