The economic recovery of developing East Asia and the Pacific region faces a reversal of fortune, says World Bank Vice President for East Asia and Pacific Manuela Ferro.
Economic activity began to slow down in the second quarter of 2021, and growth forecasts have been downgraded for most countries in the region, according to the World Bank’s East Asia and Pacific Fall 2021 Economic Update.
“Whereas in 2020 the region contained COVID-19 while other regions of the world struggled, the rise in COVID-19 cases in 2021 has decreased growth prospects for 2021. However, the region has emerged stronger from crises before and with the right policies could do so again,”she says.
In a report today, the World Bank said that the movement control orders, increased precautionary behaviours and subdued labour market conditions will drag down private consumption and local economic growth in general, and thus it has revised down Malaysia’s GDP growth for 2021 to 3.3 percent compared to an earlier forecast of 4.6 percent.
Additionally, the World Bank also noted that the East Asia and Pacific region’s recovery has been undermined by the spread of the COVID-19 Delta variant, prolonging the distress for firms and households, likely slowing economic growth and increasing inequality.