Economy

Soaring prices seen as key economic challenge

(Xinhua)
Updated: 2011-02-16 15:50

GUANGZHOU - Business leaders of the Asia-Pacific Economic Cooperation (APEC) warned Tuesday that inflation will be the key economic challenge for most of the region's economies this year.

The warnings were sounded at the first APEC Business Advisory Council (ABAC) 2011 meeting, which opened Tuesday in Guangzhou, capital of southern China's Guangdong province, to prepare a report for discussion with APEC leaders in Hawaii later this year.

"Rising commodity prices will continue to contribute to inflationary pressures in emerging and developing economies in 2011," John Denton, an Australian ABAC representative and chair of the ABAC Finance and Economics Working Group, told about 200 business people at the meeting.

Containing the inflationary pressures without unduly detracting from economic growth would be the key economic challenge facing most of the economies this year, Denton said.

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His forecast came after China's National Bureau of Statistics (NBS), announced the country's consumer price index (CPI), a main gauge of inflation, rose 4.9 percent year-on-year in January, lower than market expectations of an increase of more than 5 percent.

China's January CPI figure was up from 4.6 percent in December last year, but still lower than November's 5.1 percent, a 28-month high.

Hoang Van Dung, first vice chairman and executive vice president of the Vietnam Chamber of Commerce and Industry, said China's January CPI data was better than Vietnam's, where inflation had affected exports and living standards.

"Last year, Vietnam achieved 6.8 percent GDP growth, but we still have problems with inflation. Food prices will go up, energy prices are going up, production costs are going up, this will affect our economy," Hoang said.