The Asian Development Bank (ADB) cut its growth forecasts for developing Asia on Thursday, saying financial and economic problems in Europe and the United States had cut demand for exports, although Southeast Asia remained a bright spot.
A man rides a bicycle in front of the construction site of a residential complex in Kolkata August 31, 2010.
In a revision to its April outlook, the development bank cut its forecast for developing Asia, which excludes Japan, to 6.6 percent for 2012 from 6.9 percent. It also cut its forecast for 2013 to 7.1 percent from 7.3 percent.
Earlier, ADB President Haruhiko Kuroda told a conference in Bangkok there had been a significant slowdown in Asian economies and he now expected GDP growth of around 6.5 percent this year.
China's economy was expected to grow 8.2 percent this year and India's 6.5 percent, Kuroda said. That was down from 8.5 percent and and 7.0 percent respectively in the ADB's April forecasts.
But he remained fairly positive about Asia.
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"Despite the negative (impact) already coming from the euro zone situation, we expect basically strong growth to continue this year and next, depending on each country," he said.
Thailand's economy was still expected to grow 5.5 percent this year, Kuroda said, as it recovered from devastating floods in the final months of 2011 that cut annual growth to just 0.1 percent.
However, the International Monetary Fund has cut its forecast for Thailand this year to 5 percent from 5.5 percent, Managing Director Christine Lagarde told a Thai newspaper on Thursday. For 2013 it is now forecasting 7 percent, down from 7.5 percent.
But she said that still represented "a sharp, V-shaped recovery",boosted by reconstruction work after the floods.
Releasing its revised forecasts in Bangkok, the ADB statement noted "healthy growth" in the Philippines, growing consumer demand in Indonesia, along with Thailand's recovery, were combining to support the Southeast Asian region.
"Southeast Asia's economies are expected to post growth of 5.2 percent in 2012 and 5.6 percent in 2013, virtually unchanged from predictions made in April," it said.
Most governments in the region "have sufficient policy space to ease monetary policy and provide fiscal stimulus if needed", it added.
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