By Xinhua,
Manila : The Asian Development Bank (ADB) Tuesday said developing Asian economies will revert to a more moderate growth outlook of 7.5 percent this year and experience a high inflation rate of 7.8 percent.
In its latest report, ADB said economic growth would further drop to 7.2 percent next year after Asian economies posted fastest growth of nine percent in nearly two decades in 2007.
The report entitled Asian Development Outlook 2008 Update said global price spiral of oil and food, persistent high inflation, and a prolonged slowdown in industrial countries, are the factors damaging the Asian economies’ health.
“While oil prices are likely to soften somewhat in the short run, they will remain high and volatile in the long run. High oil prices are here to stay. And as food prices are heavily influenced by oil prices, high food prices are here to stay as well,” says Ifzal Ali, chief economist of the Manila-based multilateral bank.
ADB also warns that inflationary pressures in the region are mounting and could boil over, if left unaddressed.
It said the inflation spike now seen throughout developing Asia cannot be blamed solely on cost-push factors, such as high global commodity prices.