ADB likely to cut 2009 Asian growth forecast

TOKYO: The Asian Development Bank will probably cut its 2009 growth projection for Asia's developing countries in its next economic outlook in March, the president of the Manila-based organization said on Thursday.

With economic conditions continuing to deteriorate, the region's growth is likely to undershoot the ADB's current forecast of 5.8 per cent, Haruhiko Kuroda told reporters.

Asia, which has relied on global demand for its exports to drive recent growth, is being hit hard by the worldwide downturn. From South Korea to Taiwan to Singapore, exports have plunged by double digits in recent months as American and European consumers spent less on cars and gadgets.

But Kuroda warned Asia to avoid protectionist policies that would only serve to weaken the region, such as higher tariffs and currency devaluation.

"As overseas demand plunges, especially in the US, countries may be tempted to implement nationalistic policies to sustain growth," Kuroda said.

He called instead for deeper economic integration and better policy coordination within Asia to help wean the region from its heavy dependence on the US and Europe.

Despite the current slowdown, "Asia remains the growth engine of the world," Kuroda said. "And the region will likely play a leading role in bringing about a global economic recovery."