The Washington-based bank expects the region to grow 3.2% in 2022, down from a 5% forecast in April.
The World Bank slashed its economic outlook for the Asia-Pacific region, citing China’s ultra-strict “coronavirus zero” policy as a drag on regional growth.
The Washington-based financial institution said on Tuesday it expects the region’s economy to grow 3.2% in 2022, down from a forecast of 5% in April, as China’s lockdown continues to disrupt factories and dampen spending.
China, the world’s second-largest economy, is expected to grow 2.8 percent this year and 4.5 percent in 2023, according to the bank.
The bank had previously forecast that China would grow by 5% in 2022.
The bank is the latest financial institution to downgrade its Asian growth forecast, following the Asian Development Bank (ADB) last week. Downgrades growth prospects for the region’s developing economies From 5.2% to 4.3% in 2022.
While the rest of the world is moving towards coexistence with the coronavirus, China is sticking to a zero-tolerance strategy aimed at eliminating it at all costs.
China’s economy narrowly avoided a contraction in the second quarterin the April-June period, gross domestic product (GDP) grew by just 0.4% year-on-year.
The World Bank also pointed to sharp interest rate hikes by central banks to curb soaring inflation as a risk to growth in the region.
“As countries prepare for slower global growth, countries should address domestic policy distortions that hinder long-term development,” Manuela Ferro, World Bank vice president for East Asia and the Pacific, said in a statement.