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Wholesale Inflation in Japan Hits 27-Year High


Wholesale inflation rates in Japan have hit the highest rate in nearly three decades, and India warns rising costs will hurt economic growth. Naomi Martig in Hong Kong has more on these and other business stories from the region.

Japanese wholesale inflation hit a 27-year high of 7.1 percent in July due to soaring commodity costs. It is the sharpest increase in the prices of goods traded between companies since 1981, when the nation was still reeling from the second oil crisis.

Economy and Fiscal Policy Minister Kaoru Yosano, says soaring food and oil prices are having a painful effect, but the damage may not be lasting.

Yosano says that despite signs Japan's economy is possibly nearing a recession, he believes the situation is only temporary. Government officials there are still working on economic stimulus measures.

Elsewhere, government officials in India say the country's economic growth is likely to slow to 7.7 percent for this fiscal year. Authorities say the slowdown is the result of high food and oil prices and the tightening in credit and equity markets following the U.S. subprime mortgage crisis.

Growth in India's agricultural sector is projected to be at two percent, sharply lower than the 4.5 percent growth in the last fiscal year. The country's industry and services are also likely to slow.

Shares in Li Ning's sportswear company soared last week after the Chinese athlete drew world attention as the final torchbearer in the Beijing Olympics. The Li Ning Corporation, China's largest footwear and apparel company, saw its stock climb five percent on the Hong Kong market after the opening ceremony.

The former gymnast mesmerized Olympic viewers when he ran a victory lap around Beijing's National Stadium's upper rim while suspended by cables.

Officials with the Philippine Software Industry Association say the country's software exports are expected to hit nearly $1 billion by 2010. Last year exports reached $423 million.

The industry group says companies are aiming their marketing efforts at U.S. firms that are only now beginning to outsource software development to foreign countries.

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