Asian Development Bank cuts Asia growth forecast

The Asian Development Bank slashed its 2009 growth forecast for Asia's developing economies due to plunging exports and warned today that weak demand in the United States and other markets could delay a recovery.

The bank cut its growth outlook for a region that includes China, India, South Korea and Southeast Asia from 5.6 percent to 3.4 per cent. It said that while regional giants China and India eke out modest growth, output in South Korea, Taiwan, Thailand, Malaysia and Singapore should shrink by up to 5 per cent.

"The short-term outlook for the region is bleak as the full impact of the severe recession in industrialised economies is transmitted to emerging markets," said the Manila-based ADB's chief economist, Jong-Wha Lee, in a statement.

"The concern for the region, and especially for the region's poor, is that it is not yet clear that the US, European Union and Japan will recover as soon as next year."

The downturn is Asia's worst since the 1997 financial crisis, but governments are in a better position to respond and have limited its impact by taking quick action, the bank said.

China's economy is expected to grow by 7 per cent, down from 9 per cent last year, while Indian growth is seen slowing to 5 per cent from 7.1 per cent in 2008, the bank said.