But says growth will be steady across the region at about 7.5 percent, reports Asia Sentinel

The Asian Development Bank has cut its 2011 and 2012 growth forecasts for developing Asia, citing uncertainty over global economic prospects including the downgrade of United States log-term sovereign debt, tensions in the Eurozone over debt and the knock-on effects of the devastating March 11 earthquake in Japan.

“Setbacks to their recovery have spilled over to the region,” said Haruhiko Kuroda, the ADB president, in a foreword to the bank’s mid-year reassessment of the regional outlook for 2011, titled the Asia Development Outlook Update 2011. The report is the bank’s flagship document.

However, Kuroda said, the bank is forecasting steady growth averaging 7.5 percent across the region, led by the Chinese and Indian economies.

Overall, Kuroda paints a relatively benign picture, saying that private domestic demand and intraregional trade boosted output in the first half of the year, as did rising employment and incomes, buoyant export prices, and investment.

With ample fiscal space and low debt, governments also have room to support domestic demand, he continued.

Consumer price inflation, however, remains a concern, driven by strong growth in commodity prices and rapid regional economic growth. Regional inflation is expected to hit 5.8 percent for the full year, easing slightly to a still-worrisome 4.6 percent in 2012.

READ MORE HERE