MANILA, Dec. 26 (Xinhua) -- Propelled by exports and domestic demands, Asian economies has maintained steady growth this year despite of adverse factors such as high oil prices worldwide. However, the region´s growth rate is expected to slow down in the coming year due to anticipated cooling of the world´s economy.

Led by China and India, two of the region´s most outstanding countries, Asian economy has been expanding quickly this year. The encouraging overall performance will offset restraining factors to the growth including restive oil prices, higher interest rates and bird flu.

East Asia´s economies are set to achieve an average growth of 4.9 percent for 2006, but only 4.4 percent is predicted for the next year, according to an updated forecast report published by the Asian Development Bank (ADB) in early December.

The ADB cited less demands from U.S. and EU markets in 2007 as the prime reason for East Asia´s slowdown, because developed countries are forecast to have lower growth rates compared with those of this year.

South Asia´s economies are due to expand at a rate of 8.2 percent in 2006, according to an estimate of the World Bank. As the region´s economic leader, India will achieve a growth of 8.7 percent this year as both service and manufacturing sectors boomed, according to the World Bank.

Southeast Asia will maintain a growth of 5.4 percent in 2006, lifted by improving export and strong domestic consumption, the ADB said. Vietnam has become the fastest growing economy in the region with an actual pace of 7.4 percent in the first half of the year.

The Asian financial markets have been expanding with more foreign reserves in 2006. Several Asian currencies have appreciated significantly against the U.S. dollar. Meanwhile, better market stability can be attributed to less inflation pressure as well as improving fiscal conditions of the governments.

Economic forecasters said that Asian economy growth in next year will not be so fast as that of 2006, subject to the anticipated economic slowdown worldwide, especially of U.S. and EU, two major consumers of Asian export products.

For instance, East Asia´s developing economies, except for Japan, will grow at a rate of 7 percent in 2007, lower than 7.7 percent in 2006, according to the ADB´s latest forecast.

China´s cooling down of overheated industries will also result in a lower rate of the region´s growth next year, but it is necessary in pursuit of sustainable development for East Asia and the country itself, the ADB said.

The ADB said that shrinking foreign demands, imbalance of international payment, instable world financial market, rising oil prices and even the political tensions in Korean Peninsula would constitute a threat to Asia´s economy in 2007. Asia will have to boost its domestic demand and keep low level of inflation in order to shake off the challenges.

Source: www.chinaview.cn