Wednesday 26 January 2011

ASIA AND CHINA’S INFLATION

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CHINA PRICE GAINS POSE RISK TO ASIA’S 2011 GROWTH, FITCH SAYS

Katrina Nicholas

Bloomberg, January 26, 2011

Inflation in China could hinder Asia’s economic growth and damage the ratings outlook for countries in the region this year, according to Fitch Ratings.

China’s policy makers are likely to face greater difficulty as the world’s fastest-growing major economy battles “hot money inflows” and consumer prices that rose 4.6 percent in December after advancing 5.1 percent in November, Andrew Colquhoun, Senior Director and Head of Asia Pacific Sovereigns, said today.

“If we see evidence inflationary pressures are worse or more intense than we thought, that could lead to slower growth which would be negative for the region,” he said in a telephone interview in Singapore.

Surging prices prompted China’s central bank to raise its lending rate twice last quarter and lift banks’ reserve requirements four times in about two months. Inflation may peak at 6 percent this month as snowstorms damage crops and disrupt transport ahead of the Lunar New Year holiday, Daiwa Capital Markets said in an e-mailed note today.

(...) [artículo aquí]

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