Page last updated at 06:13 GMT, Tuesday, 22 July 2008 07:13 UK

Inflation 'to hit Asian growth'

People queuing for cheap rice in Manila
Food prices have been causing problems throughout Asia

Food and oil inflation and volatility in financial markets will cut growth in Asia to 7.6% this year from 9% in 2007, says the Asian Development Bank (ADB).

The Manila-based organisation said inflation in the region was expected to rise to 6.3%, more than double the average rate of the past 10 years.

Inflation has been rising in countries across the region, where half of family expenditure is on food and fuel.

To tackle inflation fiscal authorities have been tightening credit recently.

"Rising inflation is a serious threat to the region's sustained, strong growth as high import costs of food and fuel threaten to trigger a price/wage spiral, unleashing more inflation," ADB economist Jong-Wha Lee said in the bank's semi-annual report.

Economic growth in China is expected to slow to 9.9% in 2008 and 9.7% in 2009, from a growth rate of 11.9% in 2007.

The slowdown in China is seen as being due to a gradual appreciation of the yuan, monetary tightening policies and weakening external demand, the bank said.

Growth in the 10-member Association of Southeast Asian Nations (Asean) is forecast to ease by 1 percentage point to 5.5% in 2008, the bank said.

Recession in Asia is 'unlikely'
04 Jul 08 |  Business
Inflation dangers 'threaten Asia'
15 Jun 08 |  Business
Asian bank in food crisis warning
03 May 08 |  Special Reports
India raises rates unexpectedly
11 Jun 08 |  Business
South Korean inflation picks up
02 Jun 08 |  Business
Food prices drive China inflation
12 May 08 |  Business
Asian bank offers food price help
18 Apr 08 |  Business

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Sign in

BBC navigation

Copyright © 2019 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific