East Asia and Pacific - Economic update : growing challenges

In the six months since the previous East Asia and Pacific (EAP) economic update, developing EAP has faced a challenging external environment. Financial market conditions in the region, however, have been volatile over much of the past 6 months, as in the rest of the world. Over the next two to three years, growth in developing EAP is expected to ease modestly. Poverty in developing EAP has declined rapidly in recent years, and is projected to fall further with continued growth; however, in several countries the pace of poverty reduction has been restricted by limited labor market opportunities, particularly for disadvantaged groups. The positive outlook for growth and poverty reduction in the region in this base case is subject to elevated risks. The outlook for the Pacific Island Countries (PICs) is heavily dependent on their ability to overcome geographic constraints and take advantage of the relatively narrow set of opportunities available to them. Sustaining the pace of poverty reduction will require measures to enhance the business environment, improve education and health outcomes, and strengthen social safety nets.