Asia's financial system is little affected by the US subprime mortgage problems that has triggered a global crisis, and the region overall will enjoy robust growth, the head of the Asian Development Bank has said.
"The impact on the financial sector in Asia is limited this time," ADB President Haruhiko Kuroda told a news conference in Tokyo.
"We expect a fairly robust growth to continue, although we expect the growth rate would be smaller."
Asian financial institutions had limited exposure to the risky mortgages at the core of the bad debt crisis in the US and that "fortunately saved them from getting badly affected," Kuroda said.
Still, Asia's economic growth will lose steam because of the slowdown in the US and Europe, which are main export markets for Asia, he said.
"Real economy is affected to some extent. But from the very high growth rate in Asia ... it is not causing any recession or serious economic difficulties," he said.
Kuroda cited the ADB's earlier projection that overall growth rate in Asia would be 1.5-2.0 percentage points slower this year, but that is not necessarily a problem, as many Asian economies have "overheated."
Kuroda's rather optimistic evaluation of Asian economy matched that of the International Monetary Fund.
In its World Economic Outlook released Wednesday, the IMF said Asia overall will continue to post robust growth, while slashing growth projections for the global economy and predicting that the United States would continue losing traction.
"The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s," the IMF said.
But the report said growth among emerging Asian economies is forecast to moderate to 7.7 per cent this year and 7.1 next year, from 9.3 per cent last year. In China, on-year economic growth will cool to 9.7 per cent this year from 11.9 per cent last year.
"Weakening external demand is likely to weigh on exports, but, in some cases, the impact may be mitigated by still-loose macroeconomic policies and currency depreciation," the IMF said.
The IMF projects Japan's growth to slow to 0.7 per cent this year from 2.1 per cent last year. It encouraged the Bank of Japan to maintain an accommodative monetary environment.
The central bank Tuesday kept its key interest rate at 0.5 per cent and did not join in the coordinated rate cuts by six central banks Wednesday.
Akira Ariyoshi, director of the IMF's regional office for Asia and the Pacific, expressed optimism about Japan's outlook Thursday, saying that the strong position of the corporate sector would help mitigate the impact of the global financial crisis.
