Regional growth is projected to ease to 4.5% in 2024 from 5.1% last year, the World Bank’s East Asia and Pacific April 2024 Economic Update says. Growth in developing East Asia and Pacific excluding China is projected to pick up to 4.6% this year, up from 4.4% in 2023. Growth in China is projected to moderate to 4.5% from 5.2% in 2023, as high debt, a weak property sector, and trade frictions weigh on the economy.
Among Pacific Island countries, growth is forecast to slow to 3.6% in 2024 from 5.6% last year as the post-pandemic rebound dissipates. The slowdown partly reflects normalization of growth in Fiji to 3.5% in 2024 from an exceptionally strong 8% last year.
The outlook is subject to downside risks, which include a greater than expected slowdown in the global economy, higher for longer interest rates in major economies, increased uncertainty around the world about economic policies, and an intensification of geopolitical tensions.
A Special Focus section of the report presents evidence that productivity growth among leading firms in the region has lagged that of leading global companies. The gap is especially stark in digital-intensive sectors. Because new technologies typically gain traction first among leading firms and cascade later to other businesses, this trend raises concern across the business spectrum.
Impediments to competition, uneven worker skills and weak management contribute to lagging productivity growth among firms. Opening goods and services to greater competition and enhancing human capital – through investments in teachers and in tertiary education – can help increase productivity.