Inflation and capital inflows are two challenges that threaten Asia ’s economic growth in 2011, according to one of the IMF’s leading economists.
In a recent interview with the International Monetary Fund (IMF) survey online, looking at prospects for the world’s fastest growing region, the head of the IMF’s Asia and Pacific Department, Anoop Singh, warned that the strength of Asia ’s growth could lead to the threat of inflation.
The region is exposed to the risks of weaker global economic growth and financial spillovers from advanced economies in the region, Singh said.
He suggested capital inflows needed to be managed by exchange rate flexibility and macroprudential measures.
In particular, Asian nations need to build an economic framework to ensure capital inflows can create momentum for investment, along with broader coordination for financial stability and governments need to carefully handle the timing of withdrawal from economic stimulus programmes.
However, the IMF official predicted the region’s economic importance in promoting the global economic recovery would continue to increase in 2011. Clear-sighted policies, together with promoting exports and domestic consumption – which helped boost the region’s strong economic recovery last year – will continue this year, he said./.
In a recent interview with the International Monetary Fund (IMF) survey online, looking at prospects for the world’s fastest growing region, the head of the IMF’s Asia and Pacific Department, Anoop Singh, warned that the strength of Asia ’s growth could lead to the threat of inflation.
The region is exposed to the risks of weaker global economic growth and financial spillovers from advanced economies in the region, Singh said.
He suggested capital inflows needed to be managed by exchange rate flexibility and macroprudential measures.
In particular, Asian nations need to build an economic framework to ensure capital inflows can create momentum for investment, along with broader coordination for financial stability and governments need to carefully handle the timing of withdrawal from economic stimulus programmes.
However, the IMF official predicted the region’s economic importance in promoting the global economic recovery would continue to increase in 2011. Clear-sighted policies, together with promoting exports and domestic consumption – which helped boost the region’s strong economic recovery last year – will continue this year, he said./.
