ADB sees Asian slowdown in 2009
By Chris Sleight11 December 2008
The Asian Development Bank (ADB) says GDP growth in the region's developing economies will slow to +5.8% in 2009, down from +6.9% in 2008 and +9% in 2007.
Commenting on the effects of the global financial crisis, ADB the heard of the ADB's Regional Economic Integration (OREI), Jong-Wha Lee said, "2009 is likely to be a difficult year for developing Asia but it will be manageable if countries respond decisively and collectively. Swift action by policymakers to stem both the threat to the financial systems and the real economy will allow most of the region's economies to sustain a healthy if slower expansion."
In China, economic growth next year is forecast at +8.2%, down from the +9.5% GDP increase seen in 2008. The ADB says this forecast takes into account the government's recent efforts to spur domestic demand and offset the effects of a slowdown in exports. Similarly, growth is falling in India, with a prediction of +6.5% in 2009, down from +7% this year and +9% in 2007.
The ADB is concerned that the global credit crisis is putting pressure on banks in the region, and that pressure on funding could damage key economies in developing Asia if left unaddressed. It is calling for regional policy makers to increase liquidity to prevent the threat of a regional credit crunch.