The World Bank : Countries Asia Grows 7.1 % Year

 The World Bank : Countries Asia Grows 7.1 % Year

 The World Bank said rising demand from industrialized nations this year will encourage growth in many Asian countries that depend on exports .

In a semi-annual report on the condition of the East Asian economies , the World Bank predicts developing economies in Asia will grow at an average 7.1 % this year , not much changed from 2013. China will grow 7.6 %, slightly down from 7.7 % in 2013 , says the World Bank .

According to the World Bank , the reduction of bond-buying program in the United States ( U.S. ) this year - which is predicted to increase yields in the United States - have not led to major losers Asian markets so far .

" Stronger global growth this year will help Asia grow at a rate that is relatively stable while adjusting to global financial conditions more stringent , " said Axel van Trotsenburg , World Bank vice president for East Asia .

However, the rate of growth in developing Asian countries is much slower than the average growth in 2009-2013 that amounted to 8 % .

Many economists assess the global economic revival this year has not been too lift Asia , as previously thought . It is not yet known whether the stronger growth in the U.S. and European release of last year's recession spurred demand for Asian exports .

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South Korea's exports rose only 2.2 % in the first quarter from a year earlier . Some sectors , such as the export component of smartphones , performing better than other sectors . South Korea is a major exporter of technology and electronic equipment .

Taiwan's overall exports , the exporter of the components of a smartphone , rose only 0.4 % in the first two months of 2014 on year . Export of electronic products rose 12.7 % , according to CLSA .

According to the World Bank , there are several factors that could make them fail the latest growth projections are met . Potential growth rate below the target if the recovery in advanced economies as well as slower -than-expected increase in global interest rates takes place rapidly .

Several other factors also have an effect , such as high household debt in Indonesia , Thailand , and Malaysia . Domestic debt has the potential to burden the economy along with rising global interest rates . Malaysia will be faced with the cost of higher debt payments and must limit its budget deficit . This will weigh on domestic demand , said the World Bank .

Other risks also exist . It's like a reversal of foreign capital flows . Asian markets fell last year because foreign investors trooped to withdraw their money from Asia . Action plan selloff was triggered by the U.S. central bank , the Federal Reserve , reducing its bond purchase program .

The World Bank said that a flexible exchange rate helped the Asian face of market turmoil . Along with capital outflows, the value of the currency drops , so that the import was muffled and the current account deficit narrowed . In addition , most Asian countries have sufficient financial reserves to patch a decrease in trade and temporary external shocks , the World Bank said .

In the long term , the World Bank said Asian countries should encourage structural reforms to boost potential growth level .

WSJ