The global economic slowdown is expected to hurt Asia this year but the region would still remain the economic powerhouse of the world, led by China, India and Indonesia, according to the head of the Asian Development Bank, Haruhiko Kuroda.
Kuroda told The Associated Press in an interview yesterday, that the bank expected Asian economies, excluding Japan, Australia and New Zealand, to grow by around 7 per cent this year, down from about 7.5 per cent in 2011 and 9 per cent in 2010.
His optimistic forecast is in stark contrast to the gloomy picture drawn by the International Monetary Fund's announcement on Tuesday that it was cutting its forecast for global economic growth this year to 3.3 per cent from 4 per cent due to a slowdown in the world economy as also the possibility of a mild recession in Europe.
Kuroda said regional and domestic demand in Asia continued to remain "fairly robust" though external demand was lower "so GDP growth as a whole is also slowing."
According to him Asia had already been affected by the ongoing European financial crisis in two ways, through the withdrawal of credit in Asia by many European banks and financial institutions and slowing trade, which would impact China as Europe was its largest export market.
Koruda said if the situation were to further deteriorate sharply, it could affect Asia, hoped that the European financial contagion could be overcome.