OECD in its semi-annual outlook, said the influx of capital is Asia's emerging economies, because of its growth prospects better than other major economies, led some countries to intervene in currency markets or the introduction of capital controls.
OCED said the Asia-Pacific region a certain level of appreciation of the currency or contribute to amend the economic imbalances, countries should avoid interfering with the exchange rate, because this could turn into protectionism.
"For most of the monetary authorities, the challenge is how to adapt macroeconomic development, abnormal withdrawal of stimulus."
"Some countries have adopted unilateral measures to deal with capital inflows. If such continuation of unilateral acts, may have little effect or even counterproductive."
OECD says South Korea's economy expected in 2011 and 2012 increased by 4.3% and 4.8%, due to increased competitiveness to maintain export growth and falling unemployment support domestic demand.
The report said, strong job market and higher capacity utilization will result in upward pressure on inflation, the Bank of Korea should be allowed to normalize interest rates.
OECD said the South Korean government said Thursday in support of foreign investment in Korean bonds to re-impose the withholding tax, and authorities routinely intervene to curb won gains, but the currency appreciation, or help to control inflationary pressures.
The first time in six years in Japan in September to intervene in the foreign exchange market, the appreciation of the yen in order to control the threat to exports, but this is basically not really successful.
OECD said the strong yen, some of the overseas companies will lose market share, but Japan will not be the second recession, the job market and corporate profits due to support domestic demand.
Report claimed that, with increasing profits, corporate capital spending will pick up. OECD, and expects the Japanese economy will grow 1.7% in 2011, but growth will slow in 2012 to 1.3%, due to slowing exports.
OECD said it (the pace of economic growth) will be enough to end deflation situation, so the Bank of Japan should be introduced to more quantitative easing until the price increased significantly.
China's economic prospects is critical to the region because there are so many countries rely on their parts, manufactured goods and the demand for commodities.
OECD said China's economy will continue to expand, because domestic consumption to offset a slowdown in export growth, inflation and real estate non-performing loans may pose a risk to economic prospects.
OECD said the other major force in export demand - India's economy will regain sustainable growth pace of the slowdown in agricultural output due to a sharp improvement in the situation.
Food prices have gone up due to slow speed, India has avoided the inflation spiral. But India still needs to further tighten monetary policy, central bank, due to the high fuel prices remain, the strong credit demand and the economic production capacity.
OECD report shows that strong business investment and personal consumption will support the Indian economy, economic growth rate next year expected to reach 8.0%, 8.5% for 2012.
Reported that the Australian economy in the next few years will be rapid growth, due to the Asian market demand for its resources to promote the prosperity of the mining industry, although the country is also necessary to raise interest rates to suppress inflation.
The report predicts that Australia's economic growth next year will reach 3.6%, 4.0% in 2012.'s Strong economic growth should be expected after the mid-2011, pulling the unemployment rate to 5% below. (End)
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