Emerging markets will face grave problems in controlling inflation and money supply because of the expansionary economic policies of industrialised countries seeking to prevent gridlock in their financial markets, the head of the United Nations Development Programme warned on Tuesday.

“This may cause us a lot of headaches in the next two or three years,” said Kemal Dervis, the UNDP administrator and former economy minister of Turkey, who was the architect of that country’s successful economic stabilisation programme. “We are seeing excessively expansionary economic policies, just as we did when the dot.com bubble burst.”