Asian GDP stronger than in 70s even with oil prices, Muto says

Asian GDP stronger than in 70s even with oil prices, Muto says

Asian economies are stronger today even with record high oil
prices compared with the 1970s when they were hit by the last oil
shocks, Bank of Japan Deputy Governor Toshiro Muto said.

"Some Asian currencies like the Indonesian rupiah came under
pressure when oil prices reached record highs this August," he
said in a speech in Tokyo on Monday.

"However, the economic fundamentals of most Asian countries
are much stronger than in the 1970s when they were hit by the
worst oil market turmoil ever."

Asian countries responded swiftly this time around by raising
interest rates or slashing public fuel subsidies, he said. "These
prompt actions have helped them minimize potential disruptions to
their economies."

Surging oil prices may fuel global inflation, the Group of 20
industrial and developing nations said on Sunday, as policy
makers including the European Central Bank's Jean-Claude Trichet
and the U.S. Federal Reserve's Alan Greenspan weigh interest rate
increases.

Central bankers are stepping up their inflation-fighting
rhetoric as a 49 percent surge in oil prices this year prompts
companies to raise prices.

Trichet said inflation may exceed the ECB's 2 percent ceiling
in 2006, inching the bank closer to its first rate rise in five
years.

Price risks "appeared to have increased," the minutes of the
last U.S. Federal Reserve meeting released Oct. 11 said.

Ongoing reforms of the Chinese currency system could lead to
substantial changes in the "monetary landscape" between Asia and
the U.S., Muto said at the annual joint meeting of Japan-U.S.
Southeast Association forum in Tokyo. -- Bloomberg