China, India spur growth in developing Asia: ADB
Tuesday, 18 September 2007
MANILA, Sept 17 (AFP): Growth in developing Asian economies should rise more than eight per cent this year and next buoyed by strong performances from China and India, the Asian Development Bank (ADB) said today.
In a regional update, it forecast a modest slowing of growth and warned of higher risk factors next year, arising notably from a tightening in credit markets. "Momentum in (China) and India supports fast growth at the regional level," the Philippines-based lender said, raising the region's gross domestic product (GDP) forecast for this year to 8.3 per cent from 7.6 per cent.
Next year's growth should be 8.2 per cent, up from the earlier forecast in March of 7.7 per cent, according to an update of its Asian Development Outlook report released here Monday.
China, on the back of a 13-year high 11.5 per cent GDP growth in the first half, is now expected to grow 11.2 per cent this year and 10.8 per cent in 2008, up from the earliest forecast of 10.0 and 9.8 per cent respectively.
"The now familiar pattern of vigorous investment spending and rapid expansion of exports underpinned growth" in China, the report said.
India, which grew by an 18-year high of 9.3 per cent in the three months to June, is now expected to expand by 8.5 per cent this year and next, up from ADB forecasts earlier this year.
"The brightest story we have to tell is about India," chief ADB economist Ifzal Ali said, praising its economy, which accounts for 80 per cent of South Asian GDP, in reining in inflation.
Developing Asia, which excludes Japan, grew 8.5 per cent last year. The bank revised upward its inflation forecast for the region by a percentage point to 4.0 per cent this year and by 0.6 points to 3.8 per cent next year.
The ADB said this year's updated forecast anticipated a modest slowing of the global economy and a mild recovery in the United States through 2008.
"But the downside risks to growth in 2008 are elevated, and much will depend on whether distress in credit markets deepens and spills over into the wider financial system and real economy," the report said.
In a regional update, it forecast a modest slowing of growth and warned of higher risk factors next year, arising notably from a tightening in credit markets. "Momentum in (China) and India supports fast growth at the regional level," the Philippines-based lender said, raising the region's gross domestic product (GDP) forecast for this year to 8.3 per cent from 7.6 per cent.
Next year's growth should be 8.2 per cent, up from the earlier forecast in March of 7.7 per cent, according to an update of its Asian Development Outlook report released here Monday.
China, on the back of a 13-year high 11.5 per cent GDP growth in the first half, is now expected to grow 11.2 per cent this year and 10.8 per cent in 2008, up from the earliest forecast of 10.0 and 9.8 per cent respectively.
"The now familiar pattern of vigorous investment spending and rapid expansion of exports underpinned growth" in China, the report said.
India, which grew by an 18-year high of 9.3 per cent in the three months to June, is now expected to expand by 8.5 per cent this year and next, up from ADB forecasts earlier this year.
"The brightest story we have to tell is about India," chief ADB economist Ifzal Ali said, praising its economy, which accounts for 80 per cent of South Asian GDP, in reining in inflation.
Developing Asia, which excludes Japan, grew 8.5 per cent last year. The bank revised upward its inflation forecast for the region by a percentage point to 4.0 per cent this year and by 0.6 points to 3.8 per cent next year.
The ADB said this year's updated forecast anticipated a modest slowing of the global economy and a mild recovery in the United States through 2008.
"But the downside risks to growth in 2008 are elevated, and much will depend on whether distress in credit markets deepens and spills over into the wider financial system and real economy," the report said.