ADB raises developing Asia’s economic growth forecast for 2006-07

Chandi Dharmaratne

MANILA, Sept 6, 2006 (AFP) – China and India are expected to push developing Asia’s economic growth to a better than expected 7.7 percent this year despite high oil prices, the Asian Development Bank said in a report here Wednesday.

The bank said average inflation in the region should rise to 3.8 percent this year from 3.4 percent in 2005, though inflation pressures are ebbing in some countries while expectations are rising in others.

“Monetary authorities continue to show vigilance and generally lean toward tightening. Policy rates have tracked up in many countries,” it added.

The forecast is contained in an update of the Philippines-based lender’s annual publication, the Asian Development Outlook, which had projected 7.2 percent and 7.0 percent growth for this year and next in its earlier edition published on April 6.

The region’s outlook “is supported by strong performances by (China) and India, since together these two economies account for over 50 percent of regional GDP (gross domestic product),” it said.

China’s economy, which grew at 10.9 percent in the six months to June is now expected to grow by 10.4 percent for the entire year and 9.5 percent in 2007, higher than the ADB’s original forecast