BLEAK OUTLOOK FOR ASIA, BUT REGION CAN COPE WITH CRISIS; ADB.

TASHKENT, April 1 Asia Pulse - Developing Asia's economic growth will slow in 2009 to its most sluggish pace since the 1997/1998 Asian financial crisis, the Asian Development Bank (ADB) says in a new major report.

ADB's flagship annual economic publication, Asian Development Outlook 2009 (ADO 2009), released Tuesday, forecasts economic growth in developing Asia will slide to just 3.4 per cent in 2009, down from 6.3 per cent last year and 9.5 per cent in 2007.

If the global economy experiences a mild recovery next year, the outlook for the region will improve to six per cent in 2010.

Deteriorating economic prospects will hinder the efforts to reduce poverty. With the slow growth, more than 60 million people in 2009, and close to 100 million people in 2010, will remain trapped in poverty living on less than US$1.25 a day - than would have been if growth had continued at its earlier pace.

"The short term outlook for the region is bleak as the full impact of the severe recession in industrialized economies is transmitted to emerging markets," says ADB acting chief economist Jong-Wha Lee.

Despite the dismal outlook, the report says that the region is in a much better position to cope with this crisis than it was in 1997/98.

Large foreign currency reserves and steadily declining inflation rates will provide policymakers with the necessary tools to nurse their economies through the hard times ahead. Many Asian governments have already responded quickly to the crisis with appropriate financial, monetary and fiscal policies and so far the impact on financial stability has been limited, the report says.