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The other is that exports to the PRC contributed to its neighbors’ recovery from the global crisis. This provides some grounds for optimism about the PRC’s role as a second engine of growth. Source Park and Shin (forthcoming). 6% growth was both robust and broad-based even in the face of fiscal consolidation and a substantial tightening of monetary policy during the year. 9% in 2010. 8%. 1% in 2012. Sri Lanka’s peace dividend continues to support its expansion. 3% of a year earlier when decelerating inflation generally prevailed.

In virtually all cases, inflation since the global crisis is back on a rising trend, and is comparable to its precrisis rate. At this stage, inflation in Asia may not yet be a serious Jan Jul Jan Jul Jan Jul Jan Jul problem, though it may become one. Growing uncertainties 2006 07 08 09 from tensions in the Middle East as well as the recent natural Source: CEIC Data Company (accessed 10 March 2011). disaster in Japan and its consequent nuclear disruption raise Click here for figure data the risks for higher prices of oil and commodities.

The oil price surge is a global external shock, largely beyond Asia’s control. Soaring global oil prices often lead to higher domestic retail fuel prices, and broadly to higher production costs and overall prices. 1 above). In some countries, food accounts for at least 30% of the consumer price index. Food price inflation in these countries has reached double-digit levels in recent months, driving up general inflation. A key factor why inflation should be a main priority for the region’s policy makers is its impact on poverty and inequality.

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