Asia to avoid full-fledged financial crisis: ADB

Asia is expected to avoid a "full-fledged" financial crisis this time as governments and the corporate sector learned their lesson from
the previous crisis that hit the region 10 years ago, the head of the Asian Development Bank said on Friday.

"Combined with the large buildup in foreign exchange reserves, capital outflows can now be handled more effectively than in the past. And reforms have improved financial systems," Haruhiko Kuroda said in a speech to the Asia Society in New York.

"A range of indicators also point to a healthier corporate sector in Asia. The result is that a full-fledged financial crisis in the region is unlikely," he added.

Nevertheless, the region is already feeling the economic impact of the global crisis, Kuroda said, forecasting that the aggregate economic growth for developing Asia will decline by 1.5 percentage points this year from the record 9.0 per cent of 2007.

"The giant economy of China and India, which account for a large portion of the growth estimate, have already seen growth slow significantly," he said.

On a positive note, Kuroda said, inflation is also declining in Asia as commodity prices fall and demand weakens.

Source: EconomicTimes