Singapore (Platts)--18Sep2007

Developing Asian economies will register solid economic growth in 2007,
driven by China and India, the Asian Development Bank said in a report
released Monday. 
     China and India, which together account for 55.3% of the total gross
domestic product in developing Asia, recorded their fastest growth in 13 years
in the first half of 2007, the ADB said. 
     The bank's "Asian Development Outlook 2007 Update" said growth in Asia
was now more broad-based as other regions such as South Asia and Central Asia
continued to post robust growth, while other economies such as Indonesia and
the Philippines were expanding at a faster clip. 
     The report, however, warned that economic outlook for 2008 was hazy as
uncertainty reigned in global financial markets and worries mounted about the
health of the US economy. 
     The ADO report forecast growth in Asia and the Pacific at 8.3% in 2007,
up from an earlier estimate of 7.6%. Provided the global economy steadies,
growth of 8.2% was anticipated in 2008, the bank said. 

     SHARP DIVE IN ASIAN ECONOMY UNLIKELY
     "While the jury is still out on the events unfolding in credit markets
and the broader global economy, a sharp dive in Asia's economic growth still
seems unlikely," the ADB said. 
     "Developing Asia's defenses against external shocks are solid and it can
weather a slowdown in the US. The region's growth prospects will continue to
depend on how well the countries address their internal challenges," said
Ifzal Ali, chief economist of the Manila-based development bank. 
     The ADO update also said global risks to economic outlook now appeared
accentuated. It highlighted that developing Asia would surely suffer if the US
economy slowed abruptly, but the impact might be modest and short-lived. 
     The report also listed avian flu, geopolitical and security risks in some
parts of the region, and political uncertainty in a few countries as downside
risks obscuring the outlook for a number of economies. 

     CHINA SEEN GROWING 11.2% THIS YEAR
     East Asia is now expected to grow by 8.9% in 2007. The ADO update lifted
growth forecast for China to 11.2% this year. It said brisk exports, strong
investment and buoyant consumption was expected to drive economic growth to
10.8% in 2008, an upward revision from the 9.8% projection in March. 
     South Asia, which continues to consolidate on its progress of recent
years, is expected to grow at 8.1% in 2007. The ADB sees potential growth
rates in Bangladesh, India and Pakistan now "on a more stable trajectory." It
projected India's economy to expand by 8.5% in 2007 and 2008. 
     Southeast Asia as a whole was now expected to grow at 6.1% in 2007, the
ADB said. "Private sector dynamism will help Vietnam to post a scorching
growth of 8.3% in 2007, while the Philippines' growth forecast is now upgraded
to 6.6% in 2007 after the country registered its fastest first-half growth in
almost 20 years." 
     Growth in Indonesia continued to edge up and was now expected at 6.2% in
2007, the ADB said. Growth in Thailand was expected to be close to the earlier
estimate of 4% in 2007 "as political uncertainty continues to undermine
consumer and private investment confidence." 
     Central Asia's growth estimates for 2007 have been raised to 11.1% as
high oil prices and mineral exports continue to support economic expansion in
the region, the bank said. 
     The economic report said while inflationary pressures emerged in some
parts of the region in 2007, prospects for inflation in 2008 were difficult to
predict as uncertainty shrouded the global economy. If growth turns out to be
slower than anticipated, inflation could come down more quickly, it added.