ADB warns of difficult 2009 for AsiaDecember 11th, 2008 - 11:51 am ICT by IANS
Manila, Dec 11 (DPA) Developing Asia’s economic growth will slow down to 5.8 percent in 2009 as the impact of the global financial crisis spreads to emerging markets, the Asian Development Bank (ADB) warned Thursday.According to the Asia Economic Monitor of the Manila-based ADB, Asia’s economic resilience will be tested by weakening exports and a sharp slowdown of private capital flows due to the global slump.
“The coming year will be a difficult one for developing Asia but it will be manageable if countries respond decisively to restore confidence in the financial system and real economy, and collectively to avoid the effects of contagion,” the report said.
“The deteriorating external environment will hurt developing Asia’s immediate growth prospects,” it added.
Aggregate gross domestic product (GDP) growth is forecast to fall to 5.8 percent in 2009, down from this year’s estimated 6.9 percent.
In 2007, developing Asia’s GDP expanded nine percent, the ADB report said.
GDP growth in emerging East Asia - which includes the 10 members of the Association of South-East Asian Nations, China, Hong Kong, Taiwan and South Korea - will slow down to 5.7 percent in 2009, down from 6.9 percent in 2008.
China, the region’s growth engine, is expected to see its GDP grwoth go down to 8.2 percent in 2009 from 9.5 percent in 2008 even as the government has undertaken measures to spur domestic demand to offset a slowdown in experts and private investment growth.
The report said Asia’s economic outlook faced major risks including a sharper or prolonged global recession, persistent financial stress with volatile capital flows and further tightening of external and domestic funding conditions.
The ADB urged the region’s policymakers to move swiftly to reduce the risk of a regional credit crunch.
It recommended that policymakers step up their monitoring of local financial markets and have clear policies to deal with stressed institutions, as well as provide adequate provisions of foreign and domestic liquidity so that credit continues to flow into the economy.
It also urged the region’s authorities to continue to improve regulation and oversight of financial systems to strengthen transparency and accountability, broaden financial markets to enhance resilience, and reinforce cross-border cooperation.
Tags: asian development bank, association of south east asian nations, credit crunch, east asian nations, financial stress, global financial crisis, global recession, growth prospects, hong kong taiwan, south east asian