Washington: Two Asian giants, India and China, would continue to lead the economic growth story of this continent as this past year, reports PTI quoting a top International Monetary Fund (IMF) official.
"We expect growth to remain strong. We expect it to settle at a more sustainable rate of about 7% for Asia as a whole, slightly down from 8% in 2010. We see China and India continuing to lead Asia's growth," IMF head (Asia-Pacific) Anoop Singh said yesterday.
"Despite this positive outlook, there are still downside risks, but these mainly come from the external environment: the risk that global growth could be weaker than we anticipate.
Also financial spill-overs from advanced countries, especially in Europe, could be another source of concern, and constitute another downside risk," Mr Singh said in interview to the IMF online survey.
However he warned that the strength of Asia's growth could lead to the threat of inflation.
Asia had to contend with the risks posed by possibly weaker global economic growth and financial spill-overs from advanced economies, he suggested, but predicted that the region's economic importance would continue to increase, he added.
"I think what you've been seeing in the last decade has been the further rise of Asia, and this time I will say it is a large part due to the rapid growth in China and India and this is expected to continue over the medium and the long term," Mr Singh said in response to a question.
Certainly the region has a certain dependence that needs to be rebalanced so that the momentum comes from a broader set of policies, he said.
"It is true that across Asia the region has been more dependent on exports than other emerging markets in the world.
And, therefore, in order to maintain these high growth rates, we do believe the region should reduce its reliance on export growth and we have emphasised the importance of rebalancing. That is, to raise domestic demand in Asia. This is also a major topic in our discussions with countries in Asia," Mr Singh said.
In 2011, he said Asia will face two set of challenges.
The first will involve managing the timing and exit from policy stimulus that many countries in Asia have used.
"This is because output is growing above potential in most economies. In fact, output gaps are closing and inflation pressures are emerging. So, our view is that although many countries have taken steps to remove monetary stimulus, there still is further room to remove policy stimulus," he said.
New Delhi: Finance minister Pranab Mukherjee today said that food inflation at 18.32% for the week ended 25th December, remained an area of concern, reports PTI.
"It has moved further. It is an area of concern," the finance minister told reporters after the government's weekly data showed that the food inflation kept climbing for the fifth straight week.
The weekly inflation figure is the highest during the past one year.
Soaring onion and other vegetables' prices led to the sharp rise in inflation at 18.32% for the week that ended on Christmas, up from 14.44% recorded in the previous week.
However, Mr Mukherjee added these were weekly variations and figure for December month was yet to come before a final assessment could be made.
"These are weekly (figures). Let us wait for monthly figures. These are weekly variations, but is a matter of concern," he added.
The overall inflation in November was 7.48%, from 8.58% a month ago.
During the week, prices of vegetables rose by 58.58% in the wholesale markets.
Among individual items, onions became dearer by 82.47% on an annual basis, while eggs, meat and fish became costlier by 20.83%, fruits by 19.99% and milk by 19.59%.