Economic growth and rising commodity and food prices
are fuelling inflation in emerging economies, but these countries have
previously withstood inflation running into the thousands of %, such as
in Brazil.
What you have to focus on is (the) real interest
rates environment, because if the inflation rate is above what people get in
the banks, they will obviously have the tendency to move into equities.
Experts seems to think growth in Asia will be a little faster than
in other emerging markets. Some analysts say inflows to these fast-growing
economies, combined with existing inflationary pressure could lead to asset
bubbles, posing what some experts called "monstrous" risks.
Well we have to look out for that then don't we. Our
property boom is certainly something to be a concern for all.
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