MANILA, Dec 8: Asia’s developing economies are expected to post higher-than-expected average growth of 5.7 per cent in 2003 and 6.2 per cent next year, the Asian Development Bank (ADB) forecast on Monday.

Tadao Chino, the Japanese president of the Manila-based bank, said the economies were expected to shrug off fallout from the Iraq war, Sars epidemic, volatile oil prices and terrorism to chalk up higher growth in the next two years.

“Developing Asia will remain the fastest growing region,” he said, according to the text of remarks made in Tokyo made available here.

The ADB, which tracks growth of more than 41 developing economies in Asia, had earlier projected the region would grow at 5.3 per cent this year but Chino said it should now be higher at 5.7 per cent, followed by 6.2 per cent in 2004 and 6.3 per cent in 2005.

“The outlook for a rebound in the industrialized countries in 2004-2005 and the resilience demonstrated by developing Asia in 2003 indicate the region is poised for higher growth over the next two years,” he said.

Chino did not give a breakdown of figures for individual economies.

He said Asia’s economic outlook should become less vulnerable to downturns in the industrialized countries as China-led intra-regional trade expanded and the regional economies focused on policies to spur domestic demand.

Exports from East, Southeast and South Asia to China had grown rapidly during the first half of 2003.

“The growth of intra-regional trade poses opportunities and challenges for the rest of Asia,” Chino said, pointing out that the countries need to raise productivity and competitiveness through major structural reforms over the medium term.

“In turn, these will accelerate growth over the medium to long term,” he said.

In a September report, the ADB had raised China’s GDP growth forecast for 2004 from 7.6 per cent to 7.9 per cent while growth for this year in the world’s most populous nation was increased from 7.3 per cent to 7.8 per cent.

Alongside China, the ADB had also revised upwards its 2003 forecasts for Thailand, to 6 per cent from 5 per cent, for Pakistan, to 5.1 per cent from 4.5 per cent, and for Kazakhstan, to 9.5 per cent from 6 per cent.

Singapore’s GDP growth forecast for 2003 was cut to 0.5 per cent from 2.3 per cent while South Korea’s was lowered to 3.1 per cent from 4 per cent.

Chino on Monday also cited several “distinct” features of the Asian developing economies, including the critical role of domestic consumption as a major determinant of GDP growth.

Accumulation of substantive international reserves by various countries also offered a buffer against external shocks, he said.—AFP