INTERVIEW

By Enda Curran/Dow JonesThe turmoil that has swept across global markets amid ongoing fears over Europe’s debt crisis and the US credit rating downgrade hasn’t hurt growth in Asia, with the region set to remain the engine room of the world economy, Asian Development Bank President Haruhiko Kuroda (pictured) said yesterday. The bullish remarks come as policy makers in Europe struggle to reach agreement on efforts to shore up confidence in the eurozone and as markets recover from a burst of volatility which sparked fears of a fresh global crisis. The ADB has previously flagged risks to its outlook from the woes in Europe and the US but Kuroda said they have yet to show signs of spreading into Asia. “In the short to medium term, Asia’s growth prospects are quite robust,” Kuroda told Dow Jones Newswires. Kuroda was last week re-elected to an additional five-year term at the helm of the ADB. He was previously a special adviser to the cabinet of former Japanese Prime Minister Junichiro Koizumi. He said growth in the region won’t be in the biggest economies alone. “Not just China and India, but Indonesia and other Asian countries will be able to continue high growth,” Kuroda said. China’s gross domestic product grew 9.5% from a year earlier in the second quarter, down from 9.7% in the first quarter. Growth across the region isn’t uniform, however. Japan’s economy remains mired in recession, while showing signs of a rebound, and Hong Kong posted a surprise contraction in the second quarter. The Philippines too has seen export demand soften. Policy makers around the world are looking to Asia to lead a global recovery as demand remains stunted in larger developed economies where governments are crippled by huge sovereign debt burdens. In the event of another sharp world downturn analysts note Asia’s governments and policy makers have the flexibility to loosen fiscal and monetary settings to stoke demand. But quickening inflation is an issue in the region. Because of this, World Bank president Robert Zoellick on Tuesday warned that Asia may not have the capacity to boost growth as it did in the wake of the 2008 crisis.