Asia Risks Policy Mistakes in Efforts to Boost Growth: Economy

Asian policy makers eager to sustain growth in 2012 may put their economies at risk with interest-rate cuts or fiscal stimulus that some can ill-afford.

The likelihood of “policy mistakes” in 2012 may increase as a slowing global expansion puts pressure on officials to lower borrowing costs even as inflation remains elevated in some economies, said Lim Su Sian, a Singapore-based strategist at Royal Bank of Scotland Group Plc. In India, where the central bank has paused raising rates, monthly inflation has held above 9 percent; prices in China exceeded the government’s full-year target of 4 percent every month this year.