28.5 C
Vientiane
Tuesday, October 7, 2025
spot_img

East Asia, Pacific Face Slower Growth Without Job-Focused Reforms

This Week

World Bank Laos – East Asia and the Pacific continue to grow faster than most parts of the world, but countries need stronger reforms to create more jobs and keep their economies stable amid global uncertainty, the World Bank said in its latest report released on 7 October.

In its October 2025 East Asia and Pacific Economic Update, the World Bank projects regional growth at 4.8 percent this year, slightly lower than 5.0 percent in 2024.

Vietnam is expected to lead with 6.6 percent growth, followed by Mongolia at 5.9 percent and the Philippines at 5.3 percent. China, Cambodia, and Indonesia are each projected to grow by 4.8 percent, while Thailand’s economy is expected to expand by only 2.0 percent.

Jobs Growth Lags Behind Economic Expansion

The report says that although the region’s economy remains strong, job creation has not kept up. Many of the new jobs are in low-income service sectors that do not provide long-term stability or good wages. Young people are finding it difficult to get decent jobs, and women still face barriers to joining the workforce. 

The World Bank estimates that around 25 million people will escape poverty between 2025 and 2026, but many others remain at risk of falling back into poverty.

Carlos Felipe Jaramillo, World Bank Vice President for East Asia and the Pacific, said the region is facing a “jobs paradox,” where strong growth has not led to enough good employment. 

He urged governments to push for reforms that make it easier for new businesses to start and compete, allowing the private sector to drive more job creation.

The report also shows signs of slower economic activity. Retail sales are rising, but consumer confidence has not fully recovered from the COVID-19 pandemic.

 Industrial production remains steady, but business confidence and export orders have weakened. Regional growth is expected to slow further to 4.3 percent in 2026 due to trade restrictions, global uncertainty, and weaker international demand.

The World Bank recommends that countries invest more in education, job training, and digital infrastructure, and adopt policies that help workers match the skills needed in the changing job market. It also notes that new technologies such as artificial intelligence and robotics are changing how people work, creating a need for more adaptable policies and skills development.

Implications for Laos

For Laos, the report does not include detailed information, but the country faces similar challenges. 

According to the World Bank’s earlier updates, Laos’s economy grew by around 4.1 percent in 2024 and is expected to slow to about 3.5 percent in 2025. Inflation remains high, and debt levels continue to limit government spending.

However, economic stability has improved slightly thanks to stronger electricity exports, better tax collection, and infrastructure projects such as the Thanaleng Dry Port in Vientiane.

The country’s main challenge is to turn economic growth into more stable and higher-quality jobs. Strengthening education, digital skills, and private investment will be key for Laos to benefit from regional growth and reduce poverty in the long term.

“East Asia’s export-oriented labor-intensive growth lifted a billion people out of poverty in the last three decades, but the region now faces the twin challenges of trade protection and job automation,” said World Bank East Asia and Pacific Chief Economist Aaditya Mattoo. “Reforms of the business climate and improvements in education could unleash a virtuous cycle between opportunity and capacity, leading to higher growth and better jobs.”

The World Bank tracks poverty at USD 6.85 a day for upper-middle-income countries.

Latest article