Emerging Asia needs to be on guard against "asset bubbles" as central banks globally loosen monetary policy, the Asia Development Bank's managing director warned on Friday.
Last month, Japan's central bank announced it would pump $1.4 trillion into the economy over the next two years, administering unprecedented financial shock treatment to end two decades of stagnation through bold monetary expansion.
The US Federal Reserve and the Bank of England have also embarked on more limited forms of "quantitative easing" or increasing money supply to revive their economies.
"The positive thing of quantitative easing out of Japan and other economies is that they will start to grow, but we have to be wary of building asset bubbles" and economic overheating, said ADB managing director Rajat Nag.
Nag noted inflationary pressures were already "on the uptick" in many countries in Asia as economies reach full manufacturing capacity.
"The robust growth that we have seen in Asia so far has eliminated slack productive capacity, so price pressures will begin to mount," Nag told reporters ahead of the formal start of the ADB's two-day annual board of governors meeting in New Delhi on Saturday.
Nag said a currency war was unlikely in Asia as a result of the fall of the Japanese yen due to Tokyo's massive quantitative easing.
The emerging Asian economies -- such as India, China, Indonesia, and Thailand but not Japan --- were on track for solid growth of around 6.6 percent this year driven by domestic and regional demand, he said.
They appeared to be on a fairly stable growth trajectory as their reliance on developed nations receded, he said.
The concern now, he added, was not so much about the region's rate of growth but the quality of growth amid deepening worries about economic inclusiveness and inequality and environmental sustainability.
"We in Asia definitely 'get it' that tackling climate change is vitally important -- of the top 20 cities that would be submerged by climate change, 15 would be in Asia -- but developing nations and advanced economies have do it together," he added.
"But unfortunately, we are not proceeding very well."
On the economic front globally, while "we're not out of the woods yet", sentiment was more bullish with the US economy picking up steam, Japan expected to show some growth and the eurozone's fortunes seen improving next year, he said.