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ADB urges Asia to focus more on services as slowdown gets worse

BANGKOK -- Economic growth in developing Asia is slowing down faster than previously anticipated due to the continuing slump in global demand, said the Asian Development Bank (ADB), which has urged Thailand and other countries to pay attention to the service sector as it has the potential to be a new source of growth.

The ADB projects developing Asia's gross domestic product growth dropping to 6.1 percent this year, against the 6.9 percent projected in April, Luxmon Attapich, senior country economist at the bank's Thailand resident mission, said Wednesday.

The regional economy is expected to expand 6.7 percent next year, with growth rates this year and next down significantly from the 7.2 percent experienced in 2011.

The decelerating growth of the region's two giants, China and India, is tempering earlier optimism, according to the ADB.

China's growth is projected to be 7.7 percent this year and 8.1 percent in 2013, a dramatic drop from the 9.3 percent posted last year.

The Indian economy is forecast to grow by 5.6 percent this year, decelerating from 6.5 percent last year.

“Excluding China and India, the rest of developing Asia is more resilient,” said Luxmon.

The bank also revised downward its projection of Thai GDP growth to 5.2 percent this year, against the 5.5 percent forecast previously. The economy is predicted to expand 5 percent next year.

A slowdown in Thai exports has adversely affected the economy, and export growth will probably be just 5 percent this year, she added.

Public spending and domestic consumption will shore up the economy, and government policy such as the rice-pledging scheme will boost consumption, the economist said.

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