Washington: The economic growth of East Asia remains robust but is losing steam, and the region should shift further from relying on exports to spurring domestic consumption, said a World Bank (WB) report.
This year, regional growth will hover around 7.6 percent, with slower expansion in China pulling down the regional aggregate, according to the report, entitled "Capturing New Sources of Growth".
Developing countries in East Asia and the Pacific grew by 8.2 percent last year, marking a sharp fall from the previous year's nearly 10 percent, reported Xinhua, citing the report.
Last year's stunted pace was largely due to lower-than-expected growth in manufacturing exports and supply disruptions sparked by the 2011 earthquake that rocked Japan and severe flooding in Thailand.
Domestic demand and investment were generally strong, aided by the loosening of monetary policy in some countries.
The global lender reiterated its frequent recommendation that the region reduce its reliance on exports and shift further toward internal consumption.
Such a shift, it said, is especially important as the eurozone stumbles and demand takes a hit amid the Greece-Spain twin crises.
The European Union, along with the US and Japan, accounts for more than 40 percent of the region's exports, and European banks provide one-third of trade and project finance in Asia.
"As external demand is likely to remain weak, countries in developing East Asia and Pacific need to rely less on exports and more on domestic demand to maintain high growth," the report said.
"Already, many countries are moving in this direction, but there is further scope for rebalancing," it added.
World Bank economist Bryce Quillin, lead author of the report, said that some countries will need to stimulate household consumption while some others should consider boosting investment, particularly in infrastructure.
"Governments would need to focus on accelerating the preparation of infrastructure projects," he said
First Published: Wednesday, May 23, 2012, 13:00