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A Dec 10 report by the World Bank forecasts that real GDP growth in East Asian developing countries will fall by 1.8% from 2008 to 2009, to a rate of 6.7%. When including developed countries, the rates drop by 1.7% to 5.3% over the same period.

This is not too surprising since, as discussed below, the heavily export-oriented economies in the region are seeing the effects of declining demand impact their balance sheets. I wonder, too, about the rapid increase in the relative value of the USD over recent months. Many countries in the region fix their currencies (in varying degrees) to the greenback as a hedge against fluxuations in exchange rates - a resurgent USD means their exports are going to be more expensive just as demand is declining.

The good news from the WB: countries in East Asia are much better prepared for today's turmoil than they were a decade ago. In particular, "the countries which have entered this crisis with low debt burdens, surpluses in their fiscal and external current accounts and large external reserves will have the most room to maneuver as the crisis unfolds."

Sounds like pretty standard WB-fare to me. Part of the point of building up those large external reserves in the first place was to prepare for just such an occassion. I just hope it pays off and the analysts are "more right" than they have been in the past.