India and China to Spearhead Asian Economic Growth in 2010

• Sunday, January 17th, 2010

Haruhiko Kuroda, president of the Asian Development Bank is hopeful that Asian economies as a whole will post a growth rate of 6.6% this year compared to last year’s 4.5%. However, he warned the two major Southeast Asian economies of the chances of inflation ruining their good show.

“Asia has begun its emergence from the global downturn. As such, we believe this to be the opportune time to share experiences and determine ways to further strengthen the region in the months and years ahead,” Kuroda said during the forum “Impact of the Global Economic and Financial Crisis” organized in ADB headquarters in Manila.

The forum participants observed that policymakers of India and China need to devise methods to contain inflation. With the respective economies recovering, policy changes need to be implemented immediately to continue in the growth trajectory.

The report ‘Impact and Policy Responses – India’ acknowledged that India emerged unscathed from the global financial crisis. The stimulus packages, prompt initiatives, country’s stable domestic consumption and Indian bank’s restricted international exposure all helped the country to tide over the crisis. The economic crisis lasted only for a brief spell, also helped the government bail out the economy with fiscal stimulus.

However, inflation and fiscal deficit are two areas that should be addressed urgently by the country’s policymakers to prevent future jolts. As the developed countries have not yet displayed a sustained recovery from the economic crisis, the country’s future growth still remains uncertain and fragile. The report has suggested a number of ways to overcome this.

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