Mumbai: The Asian Development Bank revised downwards its 2008 economic growth forecast for developing Asian economies.

In the Asian Development Outlook 2008, the Asian Development Bank watered down Asian economic growth projections, excluding that of Japan to 7.6 per cent from 8.2 per cent.

The bank has projected 7.8 per cent GDP growth for 2009. The developing economies registered 8.7 per cent average growth in 2007, measuring highest in terms of expansion in almost two decades.

ADB has also marked a coincident slowdown of the major industrial economies, surging food and fuel prices and a simmering credit crisis in the United States.

ADB's chief economist Ifzal Ali has said that Asia will not be immune to the global economic slowdown, though it would not be hostage to it either. He said Asia is tied to global activity through traditional trade channels, and even more so given its closer integration in international financial markets. He added that favorable policy conditions and strong productivity growth associated with Asian economic modernisation and structural change will keep the Asian economies on a ''robust growth path.''

ADB predicts inflation to spike to their highest regional levels in over a decade during 2008, in spite of administrative steps and subsidies to rein in rising prices. It forecasts inflation is jump to to 5.1 per cent in 2008, and relax to around 4.6 per cent  in 2009, with price hikes being the highest in Central Asia, where inflation to would stay in double digits

Inflation is already at its highest in 11 years in China, and is now threatening Vietnam, and even India.

The Asian Development Outlook asks of policymakers to tackle the problem at its root.

It says that the main economic powerhouses of China and India are estimated to grow moderately, at 10 per cent and 8 per cent respectively in 2008. It says that China, being  more open to trade than India, will have a more pronounced impact due to the slowdown in US, European Union and Japan.

South Asian economic growth is projected to lose some of its steam in 2008 due to moderation in Indian GDP growth.

Pakistan, Bangladesh and Sri Lanka would also experience deceleration as exports are expected to suffer.