EMERGING Asian economies will grow at a lackluster pace this year and next, held back by a slowdown in China and weak global demand, while cooling inflation will probably throw open the door for monetary policy easing, a Reuters poll showed.

    Much will depend on how China performs as demand for raw materials from its vast factory sector and for finished goods from its massive population could alter the growth trajectory of regional trade partners.

    China’s growth rate will probably slow further to 7 percent this year from 7.4 percent in 2014, restrained by weak lending and a housing slump, according to a Reuters quarterly global economic outlook.

    That slowdown in the world’s second-largest economy is likely to prompt more stimulus and interest rate cuts from China’s central bank later this year.

    Chinese companies had to cut prices at a faster clip to win new business, adding to worries about deflationary pressures.

    A faltering eurozone and China coupled with disinflation posed the biggest threat to the global economy this year, economists in a Reuters poll said.

    They predicted global growth was likely to average 3.5 percent this year and 3.8 percent in 2016, unchanged from October’s forecasts.

    Rapidly cooling inflation around the world, thanks to a spectacular 60 percent drop in global crude oil prices since June, has forced major central banks to ease policy.

    The European Central Bank announced a quantitative easing program last week to buy sovereign bonds and private securities each month from March through September 2016, although economists polled soon after said that won’t help bring inflation up to target.

    They also predict the ECB will have to extend the intended timeframe to beyond September next year — something entirely possible if the Bank of Japan’s QE program is any guide.

    Japan has spent trillions of yen over more than a decade with little success so far in raising inflation. Yet more stimulus is expected later this year.

    While economists slightly upgraded 2015 growth projections for most East Asian economies in the latest poll, weak consumer demand and credit growth could thwart a swift recovery.(SD-Agencies)