Asian countries must raise their fiscal expenditure in order to prevent a more pronounced slowdown next year, the Asian Development Bank warned on Thursday.

Reflecting the abrupt economic deterioration in the region, the ADB decided to update its growth forecasts for developing Asia, which excludes Japan. The region is expected to grow by 5.8 per cent next year, the lowest growth rate since 2001 and down from a forecast of 7.2 per cent from the ADB as recently as September.