Developing economies in East Asia and the Pacific are set to see slower growth this year and next as the region reels from the impact of tighter finances and a weak global environment, according to the World Bank’s latest report.

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Gross domestic product growth is estimated at 5 percent in 2023 and 4.5 percent in 2024, the World Bank said in its semi-annual outlook for East Asia and the Pacific. That compares with April forecasts of 5.1 percent for this year and 4.8 percent for the next. The latest estimates were still faster than the pace seen in other emerging markets, it said.

China accounts for some of that drag. The world’s second-largest economy will likely expand 4.4 percent next year, down from the 4.8 percent previously projected, amid property woes, increasing debt, and a fading boost from the post-Covid reopening. The 2023 GDP forecast for China was kept at 5.1 percent.

“What happens in China matters for the whole region,” the report read. “A 1 percentage point reduction in its growth is associated with a reduction in regional growth by 0.3 percentage points.”

Excluding China, East Asia and the Pacific should see slightly faster growth in 2024 as the global economy improves and revives foreign demand for the region’s manufactured goods and commodities, the World Bank said. Geopolitical tensions, possible natural disasters including extreme weather events are downside risks to the outlook, it said.