Some Asian nations behind curve in rate policy-IMF
JEJU, South Korea - Inflation is an immediate concern in Asia's emerging economies, and Vietnam, the Philippines and Indonesia may be behind the curve in interest rate policy, the IMF's deputy chief said on Monday.
"In most emerging economies, growing inflation risks are an immediate concern. In fact, real interest rates are low or have become fairly negative in several of these countries," Takatoshi Kato, Deputy Managing Director of the International Monetary Fund, said during an Asia-Europe finance ministers' meeting.
"Countries such as Vietnam, the Philippines and Indonesia appear to have fallen behind the curve in terms of their interest rate policy," he said during the meeting on the South Korean resort island of Jeju.
"Turning to the fiscal side, rising inflation risks combined with upside risks to domestic demand have reduced the scope for fiscal easing," he said.
But he added the IMF's assessment of the world economy in the face of rising inflation but slowing demand has not changed since it released its view in April.