World Bank2013-07-312013-07-312011-03978-1-4648-0071-92079-5874https://hdl.handle.net/10986/14713Real Gross Domestic Product (GDP) growth in East Asia has been moderating after a sharp rebound from the global crisis. The slowdown in growth since mid-2010, even though smaller than earlier projected, has occurred despite a stronger-than-expected recovery in high-income economies and only gradual withdrawal of the monetary and fiscal stimulus across the region. We project real GDP growth will settle to about 8 percent in 2011 and 2012 from about 9.6 percent in 2010. Inflation has become the key short-run challenge for the authorities in the region, complicated by a surge in portfolio capital inflows and rapidly increasing food and commodity prices that hit low-income households disproportionately. For many middle-income countries in East Asia, lowering inflation presents difficult policy choices. Most have eschewed the use of capital controls, and allowing exchange rates to appreciate may protect against importing inflation but jeopardizes international competitiveness. The sharp increase in commodity prices portends increased volatility for the foreseeable future. All commodity prices are on an upswing, some either at all-time highs or at levels exceeding those reached only two years ago. These latest price developments continue the trend that began earlier this decade of a steady climb in real commodity prices, interrupting a decade-long downward trend in the 1990s. Policies to provide incentives and ensure the investment needed to help develop new and greener energy sources, notably with low-carbon emissions and much improved energy efficiency should be a priority for governments in the region. Output growth throughout developing East Asia moderated in the second half of 2010 but was still surprisingly strong. This positive outcome reflected sustained monetary and fiscal stimulus measures and stronger growth in demand abroad, both of which partly offset the return of capacity utilization to pre-crisis levels. Real GDP growth in developing East Asia and Pacific amounted to 9.6 percent for 2010 as a whole 0.7 percentage points higher than our estimate in November 2010.en-USCC BY 3.0 IGOaccess to fundsadvanced countriesadvanced economiesagricultural outputagricultureanti-competitive practicesasset priceasset pricesbalance sheetsbank lendingBank officesbasis pointsbondbondsbusiness environmentCapital flowsCapital inflowscapital marketcapital market developmentcentral bankcentral bankscollateralcommoditiesCommoditycommodity pricescompetitive advantagecompetitivenessconnectivityconsumer spendingcontingent liabilitiesCopyright ClearanceCopyright Clearance Centercurrencycurrency appreciationcurrent account surpluscurrent account surplusesdebtdebt securitiesdecision makingdepositdeposit ratesdevaluationsdeveloping countriesdeveloping economiesDevelopment Bankdomestic economydomestic liquidityeconomic cooperationeconomic crisiseconomic developmenteconomic developmentseconomic expansionEconomic Geographyeconomic growtheconomic integrationeconomic performanceeconomic powerelasticityelectronic communicationsemerging marketsenvironmental sustainabilityequitiesequity issuanceequity issuesequity marketsequity pricesExchange marketexchange rateexchange ratesexport growthexporterexportersexternal tradefinancial crisisfinancial infrastructureFinancial integrationfinancial intermediariesfinancial marketsfinancial sectorfiscal consolidationfiscal deficitfiscal deficitsfiscal policiesfiscal policyfixed investmentForecastsforeign competitionforeign currenciesForeign Direct Investmentforeign exchangeforeign exchange reservesforeign interestforeign investmentforeign investorsFree TradeFree Trade AgreementGDP per capitaGlobal capitalGlobal capital flowsglobal diversificationGlobal Economic Prospectsglobal economyglobal exportsglobal marketglobal marketsglobal riskgovernment actiongovernment bondsgovernment budgetsgovernment debtgovernment securitiesgovernment subsidiesgreen investmentsGross domestic productgrowth ratesHarmonizationholdingsholdings of government securitieshourly wagehourly wageshuman capitalincomeincome levelsincomesinformation flowsInfrastructure investmentinitial public offeringsinsuranceinterest rateinterest ratesInternational BankInternational FinanceInternational SettlementsinventoryInvestment Climateinvestment ratesissuancelabor marketliberalizationliquidityliving standardslocal currencylow-income countriesmacroeconomic policymacroeconomic stabilitymarket participantsmarket sharemarket structuresMiddle Income Countriesmiddle-income countriesmiddle-income economiesmonetary authoritiesmonetary policymortgagemortgage loansnational developmentnational infrastructurenatural disasternatural disastersnatural resourcenatural resourcesNon-performing loansopen economiesoutputoutput gappatentsPensionpensionsper capita incomePremature withdrawalprivate capitalprivate capital flowsprivate investmentproduction structuresproductivity growthproductivity increasesPublic debtrapid expansionrapid growthreal estateReal exchange ratesReal GDPregional integrationregional traderegulatory frameworksReserve Fundreserve requirementsreservesreturnReturnsReturns on bondsrisk aversionrisk managementsavingsShare pricesskill shortagessmall countriessovereign bondsustainable growthtaxtaxationtelecommunicationstrade balancetrade barrierstransparencyTreasuriestroughunemploymenturban developmenturbanizationvertical integrationvolatilitywage rateswealthWorld Development Indicatorsworld economyworld marketsWTOWorld Bank10.1596/978-1-4648-0071-9