The turmoil in themarkets showed economiesin Asia were still heavily reliant on

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Asian growth will slow further this year andnext as the turbulence on global markets fans inflation, the AsianDevelopment Bank warned Tuesday.
Governments in the region will need to address inflation even if itmeans slower economic growth, the Manila-based lender said in anupdate to its 2008 Development Outlook report.
The report was written before a weekend of financial market turmoilin the United States that has already had global repercussions,after Lehman Brothers filed for bankruptcy and Merrill Lynch wasonly saved with a takeover by Bank of America.
In its report the ADB said the past eight months of turmoil in themarkets had "exploded the myth of uncoupling" and showed economiesin Asia were still heavily reliant on industrial countries, notablythe United States, for their exports.
Around 85 percent of footware imported by the United States and athird of its clothing comes from developing Asia, the bank said.
The ADB sharply increased its inflation forecast for Asia for 2008from the 5.1 percent predicted in April to 7.8 percent, and to 6.0percent in 2009.
Economic growth in 2008 is expected to drop from the 7.6 percentthat was forecast in April to 7.5 percent, and slow further to 7.2percent next year.
The ADB said it expected food prices would remain high, and thatoil would remain "well above" 100 dollars a barrel -- although NewYork's main contract, light sweet crude for October delivery, wasat just below 93 dollars Tuesday.
China's economic growth will remain unchanged at 10 percent thisyear, the ADB forecast, but it revised down slightly its 2009forecast to 9.5 percent on the expectation of a reduced tradesurplus and slower investment growth.
The ADB said that while some central banks had started to tightenmonetary policy, "some may have let the inflation genie out of thebottle by doing too little, too late, since interest rates in mostcountries are still lower than inflation."
"Containing inflation will take time as monetary policy works witha lag," the bank said.
The ADB projected double-digit inflation this year for Cambodia,Indonesia, Laos, Philippines, and Vietnam.
"Curbing inflation is the crucial macroeconomic challenge facingmost Southeast Asian countries," the bank said.