Emerging economies jacking up commodity prices: US Fed

The US Federal Reserve today blamed high growth in emerging nations for rising commodity prices which in turn is affecting the global economy.

Resurgent demand in the emerging markets has contributed significantly to the sharp recent run-up in global commodity prices, Federal Reserve chairman Ben Bernanke said here at the Banque de France Financial Stability Review Launch Event.

Bernankes remarks coincide with the meeting of finance ministers of G20. Generally,governors and heads of central bank meet a day or two in advance of the meeting of their finance ministers.

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India along with several other emerging economies like China has retained high growth,even up to 10 per cent,even while the global economy was grappling with the slowdown and recession in several countries.

However,the emerging economies face the new challenge of inflation,particularly of food items.

Bernanke also said capital flows to emerging economies are posing some notable challenges for international macroeconomic and financial stability.

These capital flows reflect in part the continued two-speed nature of the global recovery,as economic growth in the emerging markets is far outstripping growth in the advanced economies, he said.