The World Bank signaled it may lower its economic forecasts for Asia next week as Europe’s protracted sovereign-debt crisis, a faltering recovery in the U.S. and slowing Chinese growth crimp the region’s prospects.
“In line with other people we are also looking at a downgrade of the forecast,” Bert Hofman, the Washington-based lender’s chief economist for the East Asia and Pacific region, said in an interview in Singapore today. The bank will publish a review of the region’s developing economies on Oct. 8.
Asia’s weakening outlook prompted the Asian Development Bank to cut its 2012 regional growth estimate yesterday as demand for the region’s goods weakens. Central banks in Japan, South Korea, Indonesia, Thailand, India and the Philippines are scheduled to meet this month to determine monetary policy as the region gauges the need for more stimulus measures.
Growth in developing East Asia, which excludes Japan and India, will probably ease to 7.6 percent this year from 8.2 percent in 2011, the World Bank said in May. In November, the forecast for 2012 had been 7.8 percent.
“We continue to see the headwinds from Europe and to some extent the United States, where the recovery is still not as buoyant as one would like,” Hofman said. “We’re signaling that we are also seeing a slowdown in the Asian economies.”
While the Chinese “see a further slowdown,” other countries are showing “quite robust domestic demand,” he said.
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