Increasing asset prices in emerging markets despite lower inflation & growth pose risk to global growth: Mayaram
Updated: Oct 13, 2014 03:49:44pm
New Delhi, Oct 13 (KNN) Finance Secretary, Arvind Mayaram has raised concern over the situation of increasing asset prices in emerging markets despite lower inflation and growth which could trigger asset price bubble which could pose potential risk to global growth.
Mayaram garnered support from emerging market economies like China and Indonesia while batting for the need to have greater International Policy coordination to deal with the negative spill overs, the Ministry of Finance today said in a release.
Mayaram had made a detailed presentation on the subject during the Growth Strategies Session of G 20 Deputies Meeting held on October 10 at Washington DC on the side-lines of the Annual IMF/World Bank Meetings.
He said that domestic policy efforts are country specific whereas to reach the target of 2 per cent global growth in the next five years greater synergy would be required in the international policy coordination.
Mayaram reminded the dignitaries present at the meeting that back in the year 2008, at the Washington Summit, it was agreed that a broader policy response is needed, based on closer macroeconomic cooperation, to restore growth, avoid negative spill overs and support emerging market economies and developing countries, added the release.
A list of measures that could possibly have negative spill overs was also shared during the session. Mayaram emphasised that to increase global growth we not only have to look at the positive impact on country growth and spill overs but also reduce negative spill overs and risks to the world economy as a whole.
A case was also made for the International Organisations (IO’s) to include negative spill overs in their models which currently focus only on the positive spill overs. Mayaram also stated that currently the spill over analysis done by the IO's and the growth assessment are completely delinked.
He also brought to the forefront the situation of increasing asset prices in Emerging Markets despite lower inflation and growth which could trigger Asset price bubble which could pose potential risk to the global growth, said the release. (KNN/SD)
Mayaram garnered support from emerging market economies like China and Indonesia while batting for the need to have greater International Policy coordination to deal with the negative spill overs, the Ministry of Finance today said in a release.
Mayaram had made a detailed presentation on the subject during the Growth Strategies Session of G 20 Deputies Meeting held on October 10 at Washington DC on the side-lines of the Annual IMF/World Bank Meetings.
He said that domestic policy efforts are country specific whereas to reach the target of 2 per cent global growth in the next five years greater synergy would be required in the international policy coordination.
Mayaram reminded the dignitaries present at the meeting that back in the year 2008, at the Washington Summit, it was agreed that a broader policy response is needed, based on closer macroeconomic cooperation, to restore growth, avoid negative spill overs and support emerging market economies and developing countries, added the release.
A list of measures that could possibly have negative spill overs was also shared during the session. Mayaram emphasised that to increase global growth we not only have to look at the positive impact on country growth and spill overs but also reduce negative spill overs and risks to the world economy as a whole.
A case was also made for the International Organisations (IO’s) to include negative spill overs in their models which currently focus only on the positive spill overs. Mayaram also stated that currently the spill over analysis done by the IO's and the growth assessment are completely delinked.
He also brought to the forefront the situation of increasing asset prices in Emerging Markets despite lower inflation and growth which could trigger Asset price bubble which could pose potential risk to the global growth, said the release. (KNN/SD)
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