World Bank cuts Asia growth outlook, calls for virus action

The World Bank has cut its economic growth forecast for developing countries in East Asia due to the impact of the coronavirus’s delta variant

BEIJING -- The World Bank on Tuesday cut its economic growth forecast for developing countries in East Asia due to the impact of the coronavirus’s delta variant and called on governments to help the poor and small businesses avoid long-term damage.

Excluding China’s unexpectedly strong growth, developing countries in East Asia should grow by 2.5% this year, down from a forecast of 4.4% in April, the Washington-based lender said in a report. It said China, the region’s biggest economy, should expand by 8.5%.

The region is “suffering a reversal of fortune” after China, Vietnam and other governments contained coronavirus outbreaks last year, the bank said. It said business activity in Vietnam, Thailand, the Philippines and other economies was improving but now is “showing signs of slowing down.”

“The region is being hit hard by the COVID-19 Delta variant while many advanced economies are on a path to economic recovery,” the World Bank said. “COVID-19 will reduce growth and increase inequality unless the scars are addressed and the opportunities grasped.”