Eurozone crisis dampening developing Asia's growth prospects

Europe's worsening financial and banking crisis and a sluggish recovery in the United States are weighing on developing Asia's growth prospects, according to figures released today from the Asian Development Outlook Supplement (ADOS), published by the Asian Development Bank (ADB).

"Economic growth in developing Asia moderated during the first half of 2012 as slower growth in the US and euro area reduced demand for the region's exports," the report says. "Worries over the economic strength of important developing economies have also emerged recently."

ADB's latest figures predict developing Asia will expand by 6.6 percent in 2012 and 7.1 percent in 2013, lower than the 6.9 percent and 7.3 percent forecast in ADB's Asian Development Outlook published in April.

In addition to the impact of Europe's malaise, the region's development in he first half of the year has been hampered by slower growth in the two largest economies-the People's Republic of China (PRC) and India-as well as the effect of the unwinding of policy stimulus in some countries.

The PRC has seen a fall in net exports, industrial production, and in fixed asset investment, although government spending on health, education and big infrastructure projects should give the economy something of a boost.