Growth remains weak despite signs of global recovery

Growth in Emerging Asia has continued to slow, despite signs of recoveryelsewhere in the global economy. Our GDP Tracker, which uses monthly dataon output and expenditure, suggests regional output is growing at approximatelyhalf the rate it was during the pre-crisis period. Inflation in most countriesremains relatively low by historical standards, which means that central banksare likely to keep monetary policy loose in the next few quarters to supportgrowth. The two main exceptions are India, where inflation is once again on therise and Indonesia, which has the highest inflation rate in the region. Following arollercoaster couple of months, which saw big falls in financial markets inAugust, followed by a strong rebound in September, equity markets andcurrencies have been broadly stable this month. (See overview on page 2.)