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World Bank dials back Chinese growth for next three years

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World Bank dials back Chinese growth for next three years

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Fresh bad news potentially for the world economy, and bad news for sure for the Communist party running China.

The World Bank has cut its growth forecast for the world number two economy for the next three years, from an average of 7.5% to just over 7%.

All of East Asia suffers in the latest report, although the bank notes much of the deterioration in China is due to restructuring to make industries more sustainable, raising costs, but likely to provide longer-term benefits. The housing market there is also slowing.

In Indonesia the bank warns the government against the risks of capital flight, but overall the tone is one of “cautious optimism” says the bank’s regional chief economist Sudhir Shetty.

All the region’s economies need to reduce their use of external financing and move away from investment to consumer-led growth, the bank noted.