ING Group, one of the world's leading financial institutions, has predicted an optimistic year for Asia's economic growth in its latest forecast report.

The report estimated that the total Asia GDP growth, minus Japan, would reach seven percent, and China's GDP, in particular, would grow by 9.5 percent.

According to ING, undervalued currencies across the region are supporting export-driven growth, which in turn is sparking domestic demand, leading to a vicious circle of rapid GDP growth.

It is estimated that Asia is poised to see growth levels unseen since the Asian Financial Crisis, led by more than eight-percent growth in China, India and Thailand.

Even Japan expects economic growth of 2.8 percent in 2004, said ING.

The knock-on effect for Asia is partly attributed to China's increasingly important role in intra-regional trade, of which China now accounts for 17 percent, said ING.

"The Chinese economy is booming, and the boom will continue. Forecasts of a sharp growth slowdown caused by measures already taken are wrong," said Tim Condon, head of Asian Financial Markets Research of ING.

However, he also warned that China's public finances can be a possible "Achilles heel" of the booming economy. According to the report, public debt accounts for 65 percent of China's GDP, offering another argument for hard-landing scenarios.

Although rapid export and investment demand have led to rising concerns that China's economy could overheat, ING believes China's long-term growth prospects are assured.

China's forecast growth will only slacken slightly to 7.5 percent in 2005 and remain at levels that are double those of western economies for the next decade, said ING.

ING is a Netherlands-based global financial institution offering banking, insurance and asset management to over 60 million private, corporate and institutional clients in 60 countries.
 
(Xinhua News Agency April 17, 2004)