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Inflation in Asia may be under control now, but prices across the region could soon start to creep higher, with India and Southeast Asia the most vulnerable, warns independent economist Andy Xie.
"At the end of the day, you have all this money out there. It's rational to expect inflation," Xie, a former chief Asia-Pacific economist with Morgan Stanley, said. "India is the most vulnerable. It cannot solve supply bottlenecks. Southeast Asian economies like Indonesia and Thailand too."
Inflation in India could rise to 10 percent and above 5 percent in Southeast Asia, according to Xie. He expects inflation in China to rise to 4 percent - doubling from where it is now.
High inflation in India meanwhile dogged the country's central bank last year and prevented it from cutting interest rates aggressively to boost a flagging economy. India's wholesale price index, the main measure of inflation, rose 7.24 percent in November from a year earlier.
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"In Hong Kong and Singapore, the issue is very much about interest rates. So it's going to be similar to 1998," he added, referring to the property bubble that burst at the peak of the Asian financial crisis.
House prices in the two cities could plunge by half if interest rates go up, he added.
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What will this do to Home Prices in India ????
Inflation in Asia may be under control now, but prices across the region could soon start to creep higher, with India and Southeast Asia the most vulnerable, warns independent economist Andy Xie.
"At the end of the day, you have all this money out there. It's rational to expect inflation," Xie, a former chief Asia-Pacific economist with Morgan Stanley, said. "India is the most vulnerable. It cannot solve supply bottlenecks. Southeast Asian economies like Indonesia and Thailand too."
Inflation in India could rise to 10 percent and above 5 percent in Southeast Asia, according to Xie. He expects inflation in China to rise to 4 percent - doubling from where it is now.
High inflation in India meanwhile dogged the country's central bank last year and prevented it from cutting interest rates aggressively to boost a flagging economy. India's wholesale price index, the main measure of inflation, rose 7.24 percent in November from a year earlier.
--
"In Hong Kong and Singapore, the issue is very much about interest rates. So it's going to be similar to 1998," he added, referring to the property bubble that burst at the peak of the Asian financial crisis.
House prices in the two cities could plunge by half if interest rates go up, he added.
--
What will this do to Home Prices in India ????
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