GROWTH is expected to cool across Asia this year as governments tighten monetary policy to tackle rising inflation, according to a poll released yesterday.
Yet Asia’s rising economies will still lead global growth in 2011, far outpacing rich world peers.
A global survey by Reuters of around 500 economists showed China again topping the economic expansion charts for this year, even though the double-digit growth of this year is expected to drop to around 9.3 per cent.
Indian growth, meanwhile, is predicted to accelerate to 8.5 per cent in the fiscal year ending March 2012.
Both countries, however, are fighting stubborn price inflation.
In China inflation is now tipped to quicken to 4.3 per cent, a much faster build-up of price pressures than economists had expected in October’s poll.
And inflation in India is now seen at 8.8 per cent, up from 8.3 per cent expected in the October poll.
The prospect of further tightening is already spooking some foreign investors who flocked to the region last year, drawn by its robust growth and higher returns.
Indonesian stocks have recoiled after a sizzling 46 per cent gain in 2010. Indonesian price inflation has surpassed four per cent.
“Later this year, Asian policymakers are going to have to be much more aggressive to get inflation under control and the consequence of that will be weaker growth,” said Robert Subbaraman, Nomura’s Asia chief economist.
Economists expect global economic growth to slow to 4.2 per cent this year from around 4.7 per cent last year, before picking up slightly to 4.3 per cent in 2012.
City A.M. Reporter