Asian Development Bank has cut its growth forecasts for this year and for the next year in developing Asia because of weakening global demand and a slowdown in the region's two largest economies.
In a report released today, the ADB said emerging Asia should prepare for what it called a prolonged period of moderate expansion, which follows years of rapid economic growth in the region. The Manila-based lender said the unresolved European debt crisis and the looming fiscal cliff in the United States are the biggest threats to Asia's economy.
ADB report called on the developing Asian countries do more to reduce their reliance on exports and support domestic growth.
It forecasts emerging Asia to grow 6.1 percent this year and 6.7 percent in 2013. Those figures are significantly lower than its previous estimates of 6.9 percent and 7.3 percent.
The bank said the slowdown is most evident in the two regional giants - China and India. China is expected to grow 7.7 percent this year and 8.1 percent in 2013, a sharp drop from the 9.3 posted in 2011. India's growth will slow to 5.6 percent in 2012, down from 6.5 percent a year earlier.
Still, the report said that no major monetary policy interventions were necessary, saying that most countries have enough room to use fiscal and monetary tools to respond in the event of an extreme shock.
In a report released today, the ADB said emerging Asia should prepare for what it called a prolonged period of moderate expansion, which follows years of rapid economic growth in the region. The Manila-based lender said the unresolved European debt crisis and the looming fiscal cliff in the United States are the biggest threats to Asia's economy.
ADB report called on the developing Asian countries do more to reduce their reliance on exports and support domestic growth.
It forecasts emerging Asia to grow 6.1 percent this year and 6.7 percent in 2013. Those figures are significantly lower than its previous estimates of 6.9 percent and 7.3 percent.
The bank said the slowdown is most evident in the two regional giants - China and India. China is expected to grow 7.7 percent this year and 8.1 percent in 2013, a sharp drop from the 9.3 posted in 2011. India's growth will slow to 5.6 percent in 2012, down from 6.5 percent a year earlier.
Still, the report said that no major monetary policy interventions were necessary, saying that most countries have enough room to use fiscal and monetary tools to respond in the event of an extreme shock.
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