World Bank Cuts East Asia Growth Forecast, Says China's Slowdown Could Worsen

The World Bank issued a very concerning economic forecast Monday.

Across East Asia and the Pacific region, things are slowing down, particularly in China where the current economic softness is likely to worsen.

According to Reuters, Bert Hofman, World Bank's chief economist for that zone, told a briefing in Singapore, "Unlike the rest of the region, China is experiencing a double whammy -- the growth slowdown is driven by weaker exports as well as domestic demand, in particular investment growth,"

Despite this, Hofman's still expecting China to have a soft landing with growth rates of 7.7 percent this year and 8.1 percent in 2013.

In the Bank's official report released earlier in the day, it was stressed that China might experience funding problems for its aggressive investment plans.

"[G]overnments are feeling the pinch of a cooling real estate market, which lowers land sales revenues," the report said.

Sounding a little like the U.S., China's central government appears "unlikely to come up with a major fiscal stimulus package."

This is over concerns about another explosion in real estate and "a possible reversal of hot money flows."

Most troubling for the world's economy in general is the breadth of this region's economic downgrades; Hofman said at the briefing, "This is the slowest growth rate in the Asia Pacific region since 2001. It's even slower than the peak of the financial crisis in 2009."

That indeed is shocking.

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