The report forecasts that growth in the region including China will pick up

pace this year after the world's No. 2 economy relaxed pandemic restrictions
on travel and other activities. But recoveries elsewhere in the region,
excluding China, will moderate as pressures of inflation and growing
household debt slow consumer spending, it said.

Across the Asia-Pacific, economies are expected to grow at a 5.1%

annual pace this year, up from 3.5% in 2022, the report said. But not
including China, growth is expected to slip to 4.9% in 2023 after a
rebound from the worst of the pandemic of 5.8% in 2022, it said.
Major Asian economies like Indonesia, Philippines, Thailand and
Vietnam will see their recoveries slow and meanwhile face risks from
weakening global growth, spillover from the war in Ukraine and
climate change disasters.

Demand for exports from the region has slowed as the Federal
Reserve and other central banks have targeted inflation by hiking
interest rates, making it more costly to buy on credit or get
mortgages.
Meanwhile, China's economy has slowed significantly in the longer
term, even as it bounces back from the disruptions caused by the
pandemic.
Friction between the U.S. and China over trade and technology are
“the most immediate challenge” for the region, the report said.
Sanctions and other restrictions imposed by each side have to a
certain extent diverted trade to other countries. While China lost
market share in exports to the U.S. in recent years, countries like
Vietnam, Thailand and Indonesia have gained share. But geopolitics
can disrupt trade and limit sharing of knowhow while also preventing
other countries from attaining the scale of operations to serve global
markets, the report said.