The World Bank lowered its outlook for growth next year in China and across East Asia, urging officials in the region to curb inflation and ward off asset bubbles to avoid a repeat of the Asian financial crisis.
Developing East Asia, which excludes Japan, Hong Kong, Taiwan, South Korea, Singapore and India, will expand 7.8 per cent next year, slower than an April estimate of 8 per cent, the Washington-based lender said a semiannual report today. The region is forecast to grow 8.9 per cent in 2010.
“Larger inflows combined with ample domestic liquidity and rising confidence have boosted stock markets, real-estate prices and other asset valuations in some countries, precipitating fears of a new bubble,” the report said. “Authorities in East Asia need to take adequate precautions to ensure that they do not repeat the same mistake twice in slightly over a decade.”
China’s economy will grow at the weakest pace in a decade in 2011, with gross domestic product expanding 8.5 per cent from a forecast of 9.5 per cent this year, according to the bank’s report.
