The International Monetary Fund (IMF) has set out a warning regarding strong capital inflows into Asia leading the three-speed global recovery with at least 5.75% overall growth in the region.
According to IMF’s Asian-Pacific global economic report, there will be gradual growth in 2013, and inflation is expected to stay within a manageable range.
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China will remain the region’s cardinal growth engine, adding 8% to GDP in 2013 and 8.2% in 2014 the IMF report said.
According to the report, the Southeast Asian economies will grow about 6% in 2013 and 2014, including the Philippines, Indonesia, Myanmar, and Cambodia.
Along with the growth boost, the IMF advises policy makers to remain vigilant, as they must be "ready to respond early and decisively to any prospective risks of overheating", amid widening financial imbalances in certain economies.
"While the external risk of severe economic fallout from an acute euro area crisis has diminished, regional risks are coming into clearer focus. These include some ongoing buildup of financial imbalances and rising asset prices," the report said.
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