Nations Conference on Trade and Development (UNCTAD) secretary-general, Supachai Panitchpakdi, today said that monetary policy should not be used as an instrument to fight inflation, besides warning of a debt bubble in the making.
"In the past few decades monetary policies have been more and more gradually based upon inflation targeting. I see there should be other instruments to contain inflation rather than monetary policies," he said.
Monetary policy should be focused more on facilitating investors, he said.
According to him, there was a debt bubble in themaking.
"We have been burdened by the potential debt bubble from richer economies. We should not underestimate such a kind of crisis," he said.
The debt to GDP ratio will be climbing in advanced economies and go past 100% GDP, he said.
Observing that India has expanded its role in the global trading scene, he said, "I see the way of integration of India into the global trading scene at a much faster pace than some decades ago."
In terms of investment mobilisation, India is now very proactive both in inward and outward FDI, Panitchpakdi said.
"Rise in FDI in India has not only brought capital for investment in India but also a supply-chain which has brought India into a global supply chain and into technological change," Panitchpakdi said.
He said that the Asian economy would be growing at 5-6% and India's growth may go up 7-8%.
A century ago globalisation was driven by the West but now it would be driven by South and East, he said.
"This is a whole new game. You need to change governance at the global level. IMF, World Bank and WTO have to reflect the new economic power," he said.
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