Asia’s economic growth to reach 3.9 percent in 2009: ADB

Manila : The overall economic expansion of developing Asia this year was expected to rise to 3.9 percent, sustained by the region’s larger economies like China and India, the Asian Development Bank said in a report Tuesday.

The update to ADB’s flagship annual economic publication Asian Development Outlook, upgraded its forecast of the region’s growth from a slightly lower 3.4 percent projection made in March and said it is likely to top 6.4 percent in 2010.

The Philippines-headquartered development bank said Asia’s resilience is more remarkable as a deeper contraction of 3.7 percent is expected in the G3 economies – the US, the Euro zone and Japan – this year.

“Despite worsening conditions in the global economic environment, developing Asia is poised to lead the recovery from the worldwide slowdown,” said ADB Chief Economist Jong-Wha Lee.

Economic growth in East Asia is upgraded to 4.4 percent as China is seen to grow by 8.2 percent, beating the previous forecast of 7 percent, while in South Asia, economic growth is raised to 5.6 percent from the previous 4.8 percent as the Indian economy is poised to expand by 6 percent.

But elsewhere in Asia, growth prospects remained bleak, the ADB report said.

Aggregate growth in the export-dependent Southeast Asia is projected to slow to 0.1 percent this year, and Central Asia would merely grow at 0.5 percent, much lower than the 3.9 percent forecast in March. The economy of the Pacific islands will also grow at a slower 2.8 percent.

“There are notable divergences in the outlook across economies,” the report said.

To develop more resilient economies, developing Asia should broaden the scope and structure of its openness, it said.

Reducing its vulnerability to external shocks requires policy makers to tackle the geographically unbalanced structure of its trade, capital flows, and movement of workers.

By promoting closer economic linkages within the region and a more balanced internal economic structure with a bigger role for domestic demand, policy makers in developing Asia will be able to achieve rapid yet stable growth for the region, it added.

 

 

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