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Developing Asia urged to stimulate domestic growth

(Xinhua)
Updated: 2008-12-11 10:43

MANILA -- The coming 2009 will be a difficult year for developing Asia and the strong growth momentum in domestic demand is key to keeping the regional economy in good shape amid a weakening external environment, the Asian Development Bank (ADB) said Thursday.

Economic growth in developing Asia will slow to 5.8 percent in 2009, down from a likely 6.9 percent this year and 9 percent in 2007, as the impact of the global financial crisis spreads to emerging markets, ADB said in its December issue of Asia Economic Monitor (AEM).

AEM is a semiannual review of emerging East Asia's growth and policy issues, covering the 10 members of the Association of Southeast Asian Nations (ASEAN); Republic of Korea; Chinese mainland and China's Hong Kong and Taiwan.

With the global economy facing a major downturn, the region's economic resilience will be tested by weakening exports and a sharp slowdown of private capital flows, according to the report.

"2009 is likely to be a difficult year for developing Asia but it will be manageable if countries respond decisively and collectively," says Jong-Wha Lee, head of ADB's Office of Regional Economic Integration.

"Swift action by policy-makers 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," he added.