MANILA, April 2 (Xinhua) -- The Asian Development
Bank (ADB) said on Wednesday developing Asian economies would register solid
growth in 2008 despite slowdown in major industrial economies, surging food and
fuel prices and credit crisis in the United States.
The Manila-based ADB said in its flagship annual
publication, Asian Development Outlook 2008 (ADO), that developing Asian
economies will expand by 7.6 percent in 2008 and 7.8 percent in 2009.
This follows a highest growth in almost two decades
in developing Asian economies in 2007 with 8.7 percent.
"Asia will not be immune to the global slowdown,
neither will it be hostage to it. It remains tied to global activity through
traditional trade channels, and increasingly, through its closer integration in
international financial markets," says ADB Chief Economist Ifzal Ali, who
presented the report in Hong Kong, China, according to an ADB news release.
Ali attributed to strong growth in the region to
"favorable policy conditions and impressive productivity growth associated with
Asia's economic modernization and structural transformation," said the news
release.
But ADB warned that a "palpable inflation spiral" is
threatening the growth in Asia and urged policy-makers to keep close watch on
it.
Inflation is expected to "spike" in 2008 and could
hit a decade-long regional high with an average of 5.1 percent this year and 4.6
percent next year in the whole region, the report said.
Price increases will be highest in Central Asia with
two digits inflation rate, while inflation is also running at an 11-year high in
China and is a threat to other countries like Viet Nam, said ADB.
ADB urges policy-makers to tackle the problem of
inflation at its root.
"For some economies, this may mean a more flexible
exchange rate, while in others it may need a scrutiny of fiscal spending and
priorities and, in some cases, targeted measures may be warranted to ease supply
pressures that are piling on to cost pressures," said the report.
Growth in China and India, two "powerhouses" of the
region, is expected to moderate as authorities tighten policies to rein in
blistering demand and ease inflationary pressures, said the report.
China is expected to grow by a solid 10 percent in
2008 and the Indian economy is forecast to expand by 8 percent, said ADB.
ADB said the slowdown in the economies of the United
States, European Union and Japan will have a more pronounced impact on China,
which is more open to trade than India.
Growth in East Asia is expected to decelerate in 2008
to 8.1 percent from 9.3 percent in 2007. Southeast Asia will slow to 5.7 percent
in 2008, from 6.5 percent in 2007, as its export prospects are likely to be
affected by a slowdown in the global economy, said ADB.
Only Thailand is expected to post higher growth after
a return to normalcy in politics. Vietnam's economic expansion will moderate as
it grapples to "keep a lid on inflation", said ADB.
South Asia is also expected to "lose some steam" in
2008 mainly on moderation of growth in India. Pakistan, Bangladesh and Sri Lanka
will also be affected by economic deceleration in major markets, as garment
exports are expected to suffer, said ADB.
Growth in Central Asia is expected to decelerate
sharply to 7.5percent in 2008 from double digit levels in recent years on the
back of weaker expansion in the region's largest economy, Kazakhstan, said ADB.
Meanwhile, economic expansion in the Pacific Islands
is expected to pick up in 2008 with the region's biggest economy, Papua New
Guinea, benefiting from high global commodity prices and Fiji Islands forecast
to grow after contracting in 2007.
ADB also said that Asian economies are faced with a
range of structural constraints such as macroeconomic stability, integrating
into the global economy, getting prices to send the right signals, creating a
conducive business and investment climate and above all, ensuring that the
benefits of growth are shared by all.
