ADB head says inflation, markets risks to Asia growth

SINGAPORE (Reuters) - The head of the Asian Development Bank said on Saturday that inflation from rising oil and commodities prices as well as renewed turmoil in financial markets posed the biggest risks to economic growth in Asia.

Speaking to reporters on the sidelines of a conference, ADB President Haruhiko Kuroda also said that Asian economies, excluding Japan, may beat the Asian Development Bank's 2007 growth forecast of 8.3 percent.

"There is a possibility that we will even outperform that forecast," Kuroda said.

The ADB in September upgraded its 2007 growth prediction for Asia's developing economies, the world's fastest growing, to 8.3 percent from 7.6 percent. The region expanded by 8.5 percent last year.

"There are a few risks, one is of course inflationary pressures growing in the world, including very high oil and commodity prices," he said, noting that Asia's economies had so far grown strongly despite high oil prices.

"Second is of course the financial market situation. Several weeks ago, there was a bit of financial market turmoil. The market has stabilised, but you always have to be aware of such kinds of risks."

Kuroda said that in spite of those risks the ADB's main scenario for Asian economies was continued growth.