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IMF warns Asia’s rapid growth risks economy overheating

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Growth in Asia-Pacific is expected to remain robust but some economies are at risk of becoming overheated, the International Monetary Fund (IMF) warns.

The IMF said that high food and fuel prices pushed the regional inflation rate to 4.5% in February.

Further tightening of monetary policy, such as raising interest rates, would help tackle inflation, the IMF said.

It added that more flexible currencies would help ease overheating risks.

The IMF expects growth in Asia-Pacific to be close to 7% in 2011 and 2012, as the region continues to lead the global economic recovery.

It said that it expected Japan’s earthquake to have a “limited” impact on the rest of Asia but said the situation was still uncertain.
Source: BBC

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