Tapering delay 'allows E Asia to prepare for ending stimulus'

DELAY by the US Federal Reserve in tapering quantitative easing (QE) has given East Asia a reprieve to prepare for the eventual withdrawal of monetary stimulus, but the region must use this window of opportunity to make essential economic reforms, the World Bank said yesterday.

"Financial markets have stabilised after the Fed decided to delay the withdrawal of QE - giving countries a much-needed respite and a second opportunity to better prepare for eventual tapering," the World Bank said in its latest East Asia Pacific Economic Update launched in Singapore.

The World Bank is "forecasting 7.1% growth for developing East Asia in 2013. This is 0.7 percentage points lower than our forecast in April 2013, which was 7.8%". This is largely thanks to China whose growth is expected to meet the official indicative target of 7.5 per cent in 2013, the World Bank said.