Rapid growth has led to rising inequalities, says Asian Development Bank

New Delhi, Apr 11 (ANI): Developing Asia's rapid growth in recent years gave rise to a widening rich-poor divide that threatens to undermine the region's growth and stability, but governments can address the problem via shifts in spending priorities, the Asian Development Bank said.

Asian Development Bank Deputy Country Director for India, Narhari Rao, who launched the Asian Development Outlook 2012 here today said this report summarizes the macroeconomic trends globally and also in Asia and it also looks at individual countries.

" The publication also has one theme chapter, which is really looking at an issue that is affecting the region as a whole. And this year's theme chapter is on inequalities in Asia because it's been observed that whilst Asia has grown very rapidly but rapid growth has led to rising inequalities," said Narhari Rao.

In its Asian Development Outlook 2012 report, the bank said if inequality in the region had remained stable over the past two decades, growth over the years would have lifted 240 million people more out of poverty, the equivalent of 6.5 percent of developing Asia's population in 2010.

"India is another economy which has had to face the impact if global economic downturn and simultaneously in India, several macroeconomic strings have built up. The government is trying to address them. The growth forecasts both of the government and of the Asian Development outlook for India are considerably lower than what they were last year," said Narhari Rao.

"So, we are in that phase when adjustment is taking place and as India adjusts to the new global economic realities it will be at least sustaining and may be marginally increasing its growth rate," added Rao.

Senior Economist of Asian Development Bank, Abhijit Sen Gupta, said that the growth model in India is driven by domestic demand.

"The good thing about the Asian growth experience is that bulk of the growth has been driven by domestic demand. Private consumption in most economies continues to play an important part and its contribution to growth is quite high," said Gupta.

The region's emerging economies were set to cool this year before rebounding in 2013, fuelled by strong domestic demand, with risks coming from slackening trade flows owing to continued uncertainties in the euro zone.

"In 2013, the prospects are slightly brighter; overall the growth rate is estimated to be about 1.7 percent with an improvement in the growth rate for both United States and the Eurozone. But within Asia also there is significant divergences in the pattern of growth rate," said Gupta. (ANI)