Inflation remains challenging for Asian economies
The Asian Development Bank (ADB) has said inflationary pressures remain rife in Asia’s developing economies and could pose a challenge for many, leading to social tensions.
However, the region is powering ahead in the economic growth stakes, due to soaring exports, and has been leading the way in the global economic recovery.
Growth rates for the 2011 year, however, are expected to be slower than in 2010, according to the ADB.
Economic growth in Asia will slow to 7.8% this year from 9% in 2010 as the thriving economies of China and India eased slightly.
China, which is the world’s second largest economy, is forecast to expand 9.6% in 2011, compared with 10.3% in 2010.
Meanwhile, India ‘s economy is expected to grow 8.2% for the fiscal year ending 31 March, 2012 compared with a forecast of 8.6%.
China and India would continue to drive the global and regional economic recovery, the ADB said.
However, inflation remains a challenge for many economies and central banks in Indonesia, Vietnam, Thailand, China and India have all increased interest rates recently.
Inflation in the 45 Asian economies covered by the ADB’s report was forecast to rise to 5.3% this year, from 4.4% in 2010.
Food costs are soaring and are the primary cause of high inflation.