Beijing, Mar 27: Asia's economic growth will slow this year as the US credit crisis hurts demand for exports but robust expansion in China and India should help the region avoid a major slump, a UN commission said on Thursday. The region also faces a sharp jump in food prices and governments should do more to protect the poor from such shocks, the UN Economic and Social Commission for Asia and the Pacific said in a report. "Rapidly rising food prices will be the key challenge in the coming year," said Shuvojit Banerjee, an economist for the commission, said at a Beijing news conference.

"With the march towards biofuels apparently unstoppable, the region has to prepare for sustained inflation through higher food prices." The full impact of the US credit crisis, triggered by a spike in defaults on subprime mortgages in the US, is still to be seen, Banerjee said. "We cannot rule out a significant slowdown in the US and further financial turmoil," he said.

Economic output for the sprawling region, which stretches from Japan to Georgia, should grow by 7.7 per cent, down from 8.2 per cent in 2007, the commission said. It said region wide inflation should ease to 4.6 per cent, down from 5.1 per cent last year, though price rises in countries such as China will be higher. "The good news is that China and India, the region's growth locomotives, are expected to grow at a robust pace, boosting the rest of the region," Banerjee said.

The forecast is in line with those of economists who expect a US slowdown to depress Asian growth but say rising demand from the region's own consumers, especially in China, should help to fill the gap. China has set a growth target of 8 per cent this year, down from last year's 11.4 per cent.