STRONG growth in economies like India and China help exacerbate global inflationary pressures, and while demand for oil rises, the oil market is unprepared, officials of bilateral and multilateral institutions said Thursday.

Hanns Timmer, manager for development prospects of the World Bank (WB), said oil prices have doubled in the last 12 months “but Opec [Organization of Petroleum Exporting Countries] still come up with disappointing policies and face typical supply constraints…”

“It is worrisome, as these disappointing policies of Opec increases global inflationary pressures,” he added.

Timmer, speaking from the World Bank office in Washington, D.C., is one of the speakers in the interregional knowledge sharing forum on Today’s Inflation: Global Context and Local Solutions held Thursday at the Asian Institute of Management (AIM) in Makati City.

Tokyo-based Romuald Semblat, senior economist of the International Monetary Fund (IMF), said the growth of China and India are more energy and commodity intensive than those of developed economies and have resulted in the sharp increases in commodity prices.

“Most recent growth in oil demand come from emerging and developing economies with at least 95-percent increase in demand for oil in these countries,” said Semblat, who spoke during the AIM teleconference.

The IMF official said oil subsidies being implemented by some economies prevent higher prices to reflect the level of demand and energy-saving measures.

Semblat stressed that “demand has to respond to higher oil prices.”

Movements in the global prices of oil should cross the supply-and-demand divide, “thereby ensuring a demand response and encouraging conservation,” Semblat said.

“The most vulnerable groups should benefit from well-targeted policy supports,” he added.

The IMF official said other measures should include investment in the oil sector and energy resources to ensure a “stable and predictable investment regime,” and that governments should opt for a reduction in the level of protections and subsidies for biofuels production, policies on energy efficiency and to put in place agricultural policies that help boost productivity.

The IMF and WB officials maintained that macroeconomic policies are critical in addressing global inflationary pressures.

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STRONG growth in economies like India and China help exacerbate global inflationary pressures, and while demand for oil rises, the oil market is unprepared, officials of bilateral and multilateral institutions said Thursday.

THE peso on Thursday fell to its lowest level since October, hovering near P44 after domestic inflation in May jumped to 9.6 percent, its highest in nine years, putting pressure on the peso-dollar exchange as investors continue to avoid the local currency, traders said.