Controlling inflationary pressure is a major challenge for policymakers in many Asia-Pacific economies even though these economies remain strong in 2011.
Labour shortages, capacity constraints, along with rising commodity and food prices would push inflation ahead of many central bank comfort ranges, according to David Wyss, Standard & Poor's (S&P) Global Chief Economist, and Dharmakirti Joshi, Chief Economist at CRISIL, a Standard & Poor's company. S&P is a leading global rating company.
In the article, ‘Preparing for Asia's rising cost of economic growth', Mr. Joshi explains that central banks are likely to continue to raise interest rates to help contain inflation, but policymakers also face challenges associated with the region's capital inflows, which have the potential to fuel asset bubbles.
Overall, S&P believes the region's economies are likely to remain strong in 2011, although growth rates are likely to moderate from 2010 levels in most cases.
From a credit perspective, S&P Senior Credit Officer Ian Thompson notes in his article, titled ‘ Strong growth should counter Asian credit challenges In 2011', that resilient economic conditions and strong domestic demand translate into a fairly robust credit outlook for the region's sovereigns, corporates, financial institutions, and infrastructure groups. Still, the region's rebounding economies have created some stresses for 2011.
“We think that policymakers will need to be alert to the various challenges that could impair economic growth, and by extension credit dynamics,'' said Mr. Thompson.
Asia-Pacific's economies are set for another positive year in 2011, with credit conditions likely to remain generally supportive, although policymakers face a number of stiff challenges to ensure the region's economic growth, markets, and credit dynamics continue to prosper.
Source: www.thehindu.com
Labour shortages, capacity constraints, along with rising commodity and food prices would push inflation ahead of many central bank comfort ranges, according to David Wyss, Standard & Poor's (S&P) Global Chief Economist, and Dharmakirti Joshi, Chief Economist at CRISIL, a Standard & Poor's company. S&P is a leading global rating company.
In the article, ‘Preparing for Asia's rising cost of economic growth', Mr. Joshi explains that central banks are likely to continue to raise interest rates to help contain inflation, but policymakers also face challenges associated with the region's capital inflows, which have the potential to fuel asset bubbles.
Overall, S&P believes the region's economies are likely to remain strong in 2011, although growth rates are likely to moderate from 2010 levels in most cases.
From a credit perspective, S&P Senior Credit Officer Ian Thompson notes in his article, titled ‘ Strong growth should counter Asian credit challenges In 2011', that resilient economic conditions and strong domestic demand translate into a fairly robust credit outlook for the region's sovereigns, corporates, financial institutions, and infrastructure groups. Still, the region's rebounding economies have created some stresses for 2011.
“We think that policymakers will need to be alert to the various challenges that could impair economic growth, and by extension credit dynamics,'' said Mr. Thompson.
Asia-Pacific's economies are set for another positive year in 2011, with credit conditions likely to remain generally supportive, although policymakers face a number of stiff challenges to ensure the region's economic growth, markets, and credit dynamics continue to prosper.
Source: www.thehindu.com
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