The economic crisis that has gripped the developed world has started to bite in what had been one of the world's fastest-growing regions and a rise in political risk in Thailand and India could exacerbate the growing economic problems.

Although Indian annual economic growth between July and September came in stronger than expected in a Reuters poll at 7.6 per cent, data on Friday showed, it marked the slowest pace of expansion in almost four years.

Malaysian growth data, to be released later, is expected to show that the economy expanded by 4.5 per cent in the third quarter from a year earlier, which would be its worst performance in over 3 years.

Indonesia, South Korea and India have been been caught in the credit crunch due to large external corporate indebtedness. Falling foreign exchange reserves in South Korea and a rising current account deficit in Thailand only add to financial vulnerabilities as they increase exposure to external shocks.

"We know Asian economies would be caught in the direct headlight of two oncoming trains; the global credit freeze and the weak global demand," investment bank UBS said in a report issued on Friday.