Downgrade for developing nations in EAP

The World Bank said the financial systems across the EAP region remained vulnerable to external shocks, especially in countries with high private-sector debt including Malaysia. “The rate of increase in China, Indonesia, Malaysia, the Philippines and Thailand (EAP-5) debt has been much faster than the rate of increase for the rest of the world, so that EAP-5 share of total global debt increased from 3.4% in 2005 to 18% in 2019, ” it added.

KUALA LUMPUR: Following the rapid spread of Covid-19 and the heightened financial volatility, growth outlook for developing countries in the East Asia and the Pacific (EAP) region, including Malaysia, has been sharply downgraded as they face global financial shock and recession.

According to the World Bank, growth in the developing EAP region is expected to slow to 2.1% in the baseline and to a negative 0.5% in the lower-case scenario in 2020 from an estimated 5.8% in 2019.