MANILA, July 22 (Xinhua) -- Economic growth in emerging East Asia will moderate to 7.6 percent in 2008 and 2009 as the region weathers a global economic slowdown, sharp rise in food and energy prices and volatility reigns in financial markets, the Asian Development Bank (ADB) said on Tuesday.

    The region's slowing yet solid growth outlook remains vulnerable to a higher-than-expected spike in inflation, protracted slowdown in the United States and any further tremors in global financial markets, the Manila-based development bank said in its July issue of Asia Economic Monitor.

    The report warns that core inflation, a measure of price increase that excludes food and energy costs, is rising across the region, signaling that a more broad-based second-round price effect may be underway.

    Even as growth moderates, there are little signs of price pressures, fueled by high energy and food costs, subsiding. Inflation is expected to rise to 6.3 percent, more than double the rate of the past ten-year average inflation. This has serious implications as the average household in the region spends over fifty percent of its monthly expenditure on food and fuel, according to the report.

    "Rising inflation is a serious threat to the region's sustained, strong growth as high import costs of food and fuel threaten to trigger a price/wage spiral, unleashing more inflation," says Jong-Wha Lee, Head of ADB's Office of Regional Economic Integration in a press release.

    Economic growth in China, the region's economic powerhouse, will slow to 9.9 percent in 2008 and 9.7 percent in 2009 from 11.9percent in 2007 on the back of a gradual appreciation of the yuan, tightening policies and weakening external demand.

    Growth in members of the Association of Southeast Asian Nations (ASEAN) is expected to ease by one percentage point to 5.5 percent in 2008, according to the semiannual report.