The projected slowdown in developing East Asian countries is connected to the rebalancing of the Chinese economy - report

Almaty. October 8. Silkroadnews - East Asia, which accounts for about two-fifths of global economic growth, remains one of its main locomotive and the growth rate for the region as a whole should reach 6.5% in 2015, slightly below the 6.8% last year . These data are presented in the report of the World Bank.
In the published economic bulletin for the region are considered difficult global conditions faced by countries in the region: economic growth in countries with high income is reduced gradually, the volume of world trade increased at the slowest pace since 2009 and the widespread slowdown intensified in developing countries, particularly in producing countries of commodities experiencing the impact of lower prices.
Various countries of Eastern Asia have different trends in growth rates. In China, the economy is expected to grow at about 7% this year and its subsequent gradual slowing down under the influence of the transition to an economic model will rely more on domestic consumption and services.
Growth in the rest of the developing countries of East Asia should reach 4.6% in 2015, which is close to the previous year. In countries exporting commodities such as Indonesia, Malaysia and Mongolia, this year there will be a slowdown in growth and a reduction in government revenue under the influence of the decline in world commodity prices. In the countries importing commodities, growth rates will remain stable or even higher.
For example, in Vietnam economic growth is projected at 6.2% in 2015 and 6.3% in 2016. However, in many smaller countries growth will slow down. In Cambodia, the decline in agricultural production weakens the economy, although its growth rate will remain at 6.9% this year. In Myanmar, the severe flooding in July is likely to lead to a decrease in the growth rate to 6.5% compared to 8.5% in 2014. Meanwhile, in the Pacific Island countries will be observed moderate growth.
"The projected slowdown in developing East Asian countries happen due to the rebalancing of the Chinese economy and the expected recovery of the normal level of key interest rates in the United States. This adjustment can cause financial instability in the short term, but it is necessary to ensure sustainable growth in the long term",- said the chief economist of regional management of WB for East Asia and the Pacific region Sudhir Shetty.
The report predicts a gradual slowdown in the Chinese economy in 2016-2017. The probability of this scenario is due to the presence of China's strategic reserves and tools sufficient to reduce the risk of a more pronounced slowdown, including the relatively low levels of public debt, the rules restricting the placement of savings outside the banking system, and the dominant role of the state in the financial system. If slowing growth in China will be more significant ,consequences of this will be felt in the rest of the region, especially in countries associated with China through trade, investment and tourism.
Thus, in the report there are two priorities in the region: to ensure prudent macroeconomic management to address vulnerabilities in the external and fiscal fields and a more profound structural reforms aimed at encouraging private investment