HONG KONG, April 28 (UPI) -- Economies of Asian nations grew 8.3 percent in 2010 and are forecast to grow 7 percent in 2011 and 2012, but inflation remains a concern, the IMF said Thursday.
The International Monetary Fund in its regional economic outlook released in Hong Kong said economic growth in Asia is expected to remain strong because of both exports and domestic demand.
However, the Fund said the region's rapid recovery from the global economic crisis has also created pockets of overheating.
"Headline (consumer price index) inflation has accelerated since October 2010, and while this initially reflected higher commodity prices, pressures have now spilled over into core inflation and inflation expectations," Anoop Singh, head of the IMF's Asia and Pacific Department said.
"While we expect inflation in many Asian economies to increase further in 2011 before decelerating modestly in 2012, inflation risks in Asia remain tilted on the upside."
Singh said in addition to the risks posed by exuberant credit and property markets, there are also risks from higher commodity prices and volatile capital inflows.
"Further monetary tightening is necessary in economies that are facing generalized inflation pressures, as interest rates are generally negative," said Singh, adding other factors such as further fiscal consolidation and exchange rates appreciation would help contain inflationary pressures.
The Fund said the March 11 earthquake-tsunami disaster in Japan caused huge losses both in lives and property, but the government's actions helped contain the economic impact. The report said spillovers into rest of Asia through the supply chain should be limited.
