The Asian developing countries are expected to keep the momentum of economic growth in the near future, despite high oil prices and other challenges posing some threat to their healthy expansion, an Asian Development Bank (ADB) report released on Thursday says.

The report, namely Asian Development Outlook 2005 Update, forecasts that the developing Asia's growth will be 6.6 percent in both 2005 and 2006, but the impact of higher oil prices constitutes a major source of uncertainty.

The updated forecast of 6.6 percent growth for 2005 represents a small upward revision and the projection for 2006 is unchanged from that of the Asian Development Outlook 2005 released in April.

However, the report says that the overall outlook for developing Asia is "more uncertain than earlier in the year, with some risks now being more accentuated."

Projections have been revised up slightly to 6.9 percent for East Asia for 2005, driven by the higher than anticipated full- year growth of China. For the rest of East Asia, though, growth is revised down to 3.8 percent due to slower export growth.

The report says that growth in South Asia is on track for 2005, with India as the regional engine. Impact of large infrastructure investments is likely to outweigh the negative effect of high oil prices in this region, keeping the growth above 6.6 percent.

As to Southeast Asia, the report sees that a variety of factors have dimmed its outlook this year, including poor harvests and high oil prices. However, these negative sides are partly offset by continuing robust growth in Vietnam and an improving investment climate in Indonesia. Overall, 2005 growth in Southeast Asia has been revised down to 5 percent.

Central Asia's net oil exporters have benefited from the higher oil prices and new production capacity, to the degree that subregional growth in 2005 is expected by the ADB report to top 9 percent.

The report noted that oil prices, which have risen by almost 75 percent since the beginning of 2005, call for policy changes to avoid looming economic meltdown. Other risks include the possibility that growth might slow in the US and threats of virulent diseases and terrorist attacks.

The Update report is a supplemental issue of the Asian Development Outlook 2005 (ADO 2005), ADB's flagship publication forecasting economic trends in the Asia and Pacific region, released in April.

Source: Xinhua