Asia Economic Monitor - July 2011 | Asian Development Bank

Asia Economic Monitor - July 2011

Publication | July 2011
Asia Economic Monitor - July 2011

Growth across emerging East Asia moderated to 8.1% in the first half of 2011 as authorities wrestled with rising inflation. This issue also discusses managing commodity price volatility and inflation in emerging East Asia.

The Asia Economic Monitor is a semiannual review of emerging East Asia's growth and policy issues. It covers the 10 members of the Association of Southeast Asian Nations; People's Republic of China; Hong Kong, China; Republic of Korea; and Taipei,China. This issue includes a special section on managing commodity price volatility and inflation in emerging East Asia.

Highlights

  • Growth across emerging East Asia moderated in the first half of 2011 as authorities wrestled with rising inflation; domestic demand remains robust albeit with easing investment as newly industrialized economies drawdown inventory.
  • Inflation continued to rise across much of the region, driven by higher commodity prices and strong economic recovery.
  • Balance of payments surpluses narrowed on lower capital inflows, even as strong exports boosted current accounts.
  • Emerging East Asia’s stock markets were mixed in the first half as the region’s growth moderated and monetary policies tightened.
  • Most of the region’s currencies continued to gain against the US dollar, but depreciated against a basket of trading-partner currencies.
  • Bond yield curves mostly flattened as monetary authorities raised policy rates.
  • Authorities across the region shifted focus to combating inflation, raising policy rates to counter price pressures.
  • Strong fiscal balances in emerging East Asia and low foreign debt keep financial vulnerability low, while growth in bank lending slows in response to tightening monetary policies.

Contents 

  • Highlights
  • Economic Performance
  • Economic Outlook, Risks and Policy Issues
  • Managing Commodity Price Volatility and Inflation in Emerging East Asia