By ONE Liners Agency
In a recent report published by Asian Development Bank (ADB), Asia economy has forecast to grow strongly though inflation would a big problem to tackle with. According to the report economy is expected to grow by just under 8% in 2011. The annual report says Asia will expand more in next two years.
However, the growth rate of Asian economy would be largely hamper by the inflation, which is the biggest challenge and could lead to social tension.
The report also enumerates the decrease demand of goods and services from recession-hit richer countries.
The ADB's chief economist Changyong Rhee said that the developing countries, mainly from Asian regions fought hard against global recession, and now consolidating its recovery and rapid expansion in the region's two giants - the People's Republic of China and India.
Mr. Rhee was also hopeful that there had been minimal effect of the region's economy irrespective of certain natural disasters such as last month Japan's earthquake.
"Under the assumption there is no further deterioration in the nuclear situation, I really don't think the impact will be that great," He said.
He further said China and India would continue be the driving force for the regional economic recovery as well as global. However, these two regions have experienced slower growth rate compare to other regions.
Mr. Rhee worried about the inflation, which could be the biggest hurdle for policy makers in the regions. He also said that the inflation would be accelerate because of geopolitical tensions in the Middle East and the nuclear crisis in Japan, and subsequently there are high possibility of increase in oil price.
The report also emphasizes on just tighter monetary policy to control inflation, but stresses on flexible exchange rates.
It is reported that in 45 Asian economies inflation rises to 5.3% in 2011, from 4.4% in 2010. The report also warned about social unrest due to high price rise of essential commodities.
April 06, 2011 | 0
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