the growth of East Asian countries is hampered by the protectionism of partners

Economic growth in East Asian countries will slow down over the next two years, according to a forecast contained in the semi-annual report of the World Bank (WB). He expects GDP growth in the region to be 4.5% in 2024 and 4.3% in 2025, after 5.1% in 2023. Although developing economies in East Asia will grow faster than the global average, their growth rates will remain noticeably below pre-pandemic levels.

This dynamics is mainly explained by the slow recovery of the Chinese economy: the World Bank expects its growth to slow from 5.2% in 2023 to 4.5% in 2024 and to 4.3% next year (see chart). Traditionally for such reports, a significant part of it is devoted to describing the problems of China specifically: from difficulties in the real estate sector to economic contradictions with other countries – primarily with the United States (see Kommersant on January 10).

It is interesting, however, that the new WB report, for the first time in the last year, names other possible reasons for the slowdown in growth rates in the region. One of them is the protectionist policy of developed countries, in particular the USA, South Korea and Japan – key markets for products from East Asian countries. Enterprises from developing countries cannot compete there with local companies that receive large subsidies from the state. As the World Bank notes, in 2023, countries around the world deployed about 3 thousand new protective measures that distort global trade – this is three times more than was recorded in 2019.

Thailand has a particularly precarious position among the countries in the region. WB analysts predict an increase in this country’s GDP by 2.8% in 2024 and 3% in 2025 after an increase of 1.9% in 2023. However, these estimates may be worsened: much depends on the development of the conflict between the United States and China. Let us explain that the interests of these two large economies in Thailand intersect: China is expanding investments in the country, the United States is increasing trade with it. The future of Bangkok, as follows from the World Bank report, is increasingly linked to the prospect of a choice between Beijing and Washington.

According to the report, the Philippines, Vietnam and Cambodia could show stronger growth in the coming years: the World Bank expects each of these economies to grow by more than 5% this year, and by about 6% next year.

Kristina Borovikova