The World Bank raised its 2013 economic growth forecasts for China and developing East Asia today.
It said the region remained resilient despite the lacklustre performance of the global economy.
"For 2013, we expect the region to benefit from continued strong domestic demand and a mild global recovery that would nudge the contribution of net exports to growth back into positive territory," it said in its latest East Asia and Pacific Economic Update.
"Most countries in the region have retained their strong macroeconomic fundamentals and should be able to withstand external shocks," it added.
But it warned of risks such as a sharp drop in investment growth in China that could shake global confidence and a US failure to reach an agreement on tax increases and spending cuts before the end of the year.
The World Bank said China was expected to expand by 8.4% next year, fuelled by fiscal stimulus and the faster implementation of large investment projects. The latest forecast is higher than the 8.1% figure cited in an October report.
"The slowdown in the Chinese economy appears to now have bottomed out. While third quarter growth, at 7.4% year-on-year, is still low compared to last year, quarter-on-quarter growth has picked up notably, reaching 9.1% in the third quarter at a seasonally-adjusted, annualised rate," the World Bank said.
Growth in the world's most populous nation is, however, expected to slow to around 8% in 2014, with the potential pace of economic expansion gradually declining as productivity and labour force growth tail off.
For developing East Asia as a whole, next year's growth is expected to come in at 7.9 % up from an earlier forecast of 7.6%, with the Philippines and Malaysia growing by 6.2% and 5%, respectively. The international lender's previous forecast was for the Philippines to grow by 5% and Malaysia to expand by 4.6% in 2013.
The World Bank said domestic demand, in the form of both consumption and investment, has been critical to sustaining growth in East Asia, in particular Indonesia, Malaysia, Thailand and the Philippines.
"The robust growth in services this year in part reflects strong domestic demand, but is also associated with longer term trends caused by rising incomes," the World Bank said of the four countries and Vietnam.
For Myanmar, the World Bank now expects the country to grow by 6.5% next year, up from an earlier forecast of 6.2%.
While Asian governments in general had room to boost spending in the event of an economic shock, the World Bank warned that further easing of monetary policy could be detrimental to inflation.
