Kyoto: The Asian Development Bank (ADB) may boost bond sales to as much as $8 billion (Rs32,800 crore), the highest since 1998, as lending in the region soars to meet economic growth.
Debt issues by the Manila-based bank may rise from the $5.5 billion sold last year, Juanito Limandibrata, assistant treasurer of ADB, said in an interview in Kyoto.
The bank’s loan approvals increased by 28% to $7.4 billion last year. ADB sold about $10 billion of debt in 1998. “The expectation is that we are going to see the same loan demand for this year,” Limandibrata said. “Bond issuance has to be stepped up to meet our loan operation.”
The multilateral lender, which encourages economic development in the Asia-Pacific region, has raised more than $3 billion in about 40 bond sales so far this year, he said.
“Our loans cover a broad range of infrastructural projects and lending to the financial sectors in Asia,” Limandibrata said.
Slowed by a weaker US economy, Asia, excluding Japan, is expected to grow at an average 7.6% this year, down from 8.3% in 2006, according to the ADB’s latest forecast. The US economy expanded at a 1.3% annual rate in the first quarter, the slowest in four years, a report showed last month.
Still, the outlook for Asian economies in 2007 “remains favorable”, according to a statement issued in Kyoto on 5 May by Japan’s Koji Omi, China’s Jin Renqing, South Korea’s Kwon Okyu and 10 other finance ministers from Southeast Asia.
Asia’s developing economies have been reducing interest rates to boost economic growth.
The World Bank estimates developing countries need to invest 7% of gross domestic product in infrastructure each year, from an average of between 3% and 4%now