Forex News – Inflation threatens Asian market
The Asian Development Bank (ADB) has stated that the threat of high inflation could undo the progress of the past 20 years, and remains a major worry for the Asian market.
Rajat M Nag, managing director of the ADB said that inflation would exceed the 5.1% that was predicted in April. Rising food and fuel prices are the main dangers that are affecting the Asian inflation rates.
Rising inflation could damage investment and corporate earnings, which in turn could destabilise governments in the region.
Asia is home to nearly two-thirds of the world’s poor, and its poverty rate is about 19%, down from 33% in 1990. The ADB has said that this improvement is under threat from inflation.
The Asian Development Bank offered to support struggling countries in April, giving loans to help them deal with the effects of rising food prices. These loans are made available to countries to subsidise the price of staple foods to help the poor.