World Bank President: Inflation A Risk To Recovery

Interest rate hikes in the U.S. are not expected in the immediate future out of fears they could threaten the incipient recovery at a time when jobless rates remain at their highest in more than 26 years.

"If the Federal Reserve keeps interest rates low and they keep interest rates low you're going to see this danger I think increase in potential," Zoellick said.

Such concerns have sharpened, especially in China, in recent months given the 74 percent rise in the Shanghai Composite Index share benchmark since the beginning of the year. Real estate prices and commodity prices have also rallied in recent months.

"We are at the stage of the recovery where confidence is important," Zoellick said. "If you have asset bubbles that are not properly dealt with, then that could in turn undermine confidence in 2010, which is the year I'm more concerned about," he said.

Currency issues remain another daunting problem for Asian economic planners, given the weakness of the U.S. dollar and controls on the Chinese yuan that keep its value linked to the American currency, Zoellick said.

Finance ministers gathered in Singapore for the regional APEC summit endorsed monetary policies based on flexible exchange rates, but downplayed criticism of Chinese policies that some say keep the yuan artificially low, giving the country's exporters an advantage in overseas markets.