The Asian Development Bank (ADB) said on Wednesday high oil prices have yet to dent economic growth in Asia and it would be raising its economic growth forecast for the region.
"Asian economies are growing quite strongly. We will be upgrading our growth forecast to more than 8 percent," Haruhiko Kuroda, president of the ADB, told Reuters in an interview at the Apec Finance meeting in the coastal resort of Coolum.
In March, the Manila-based lender had forecast Asia's developing nations, including powerhouses China and India, to grow at 7.6 percent in 2007 and 7.7 percent in 2008.
Kuroda said a slowdown in the US economy as well as global trade imbalances posed risks to global economic growth, but there were signs that trade imbalances between top consumer United States and Asia were narrowing, thanks to the declining dollar.
"The recent trend is that the US current account deficit is now being contained and may start to decline because the dollar has depreciated and the US economy has slowed down," Kuroda said. "I think the global imbalances will start falling gradually."
Kuroda cautioned that a swift narrowing in global trade imbalances could wreak havoc on the financial markets, particularly in the foreign exchange sector, so it was important for global imbalances to be adjusted gradually. The US trade deficit with China soared to a record $232.5 billion in 2006 and is on track to surpass that this year.
Total global reserves surged 5.2 percent to $5.3 trillion in the first three months of 2007, data from the International Monetary Fund showed in June. Global reserves have increased every quarter since the first quarter of 2001, and the pace of accumulation has accelerated over the past four years in particular.
The accumulation of reserves, much of which is invested in US debt markets, has mirrored a rising current account deficit in the United States.