Thread: World Bank Chief on Asia Economy

The World Bank chief has a different warning for Asia - overheating in some markets, i.e. a substantial rise in equity and property prices leading to asset bubbles. He is asking these governments to carefully unwind their huge stimulus injections.

Asia faces new risks of overheating: Zoellick

20 hrs ago [AFP] SINGAPORE — Asia's rapid recovery from the economic crisis carries new risks of overheating, and governments must carefully unwind their huge stimulus injections, the head of the World Bank warned Wednesday.

Robert Zoellick said there were signs in some markets of a "substantial" rise in equity and property prices that could lead to asset bubbles -- the very ingredients that triggered the global crisis in the first place.

The International Monetary Fund on Tuesday said Hong Kong faced a potential surge in property prices and endorsed a government plan to cool any overheating in the market.

And in September, the head of the UN's trade and development think-tank also cautioned against a new financial bubble following the massive liquidity that was pumped into the economic system to counter the global crisis. ....