Due to the strong performance of many emerging markets in Asia and Latin America, the global economy is showing resilience in the face of the slowdown in the United States, Japan and Europe, according to a report from the Conference Board of Canada.

“Growth in the world economy has slowed from its pace of a few months ago, but the weakness has been largely confined to the United States and Europe,” said Kip Beckman, principal research associate, in a release. “Developing countries, especially those in Latin America and the Asia-Pacific region, have sustained their strong growth rates in part through trade diversification away from dependence on the struggling U.S economy.

“However, rising food and fuel costs are turning inflation into a fact of life in both developing and developed countries.”

Despite inflationary pressures, some central banks are reluctant to increase interest rates. Interest rates remain low in the U.S. for instance, because the Federal Reserve does not want to do more damage to the fragile housing market. In developing economies, higher interest rates would put upward pressure on exchange rates and make exports less competitive.

The world economy is expected to grow by 2.8% in 2008. Latin America, which will grow by 4.4% this year, is less dependent on the fortunes of the U.S. economy than it has been in the past, due in large part to its trade diversification and growing domestic markets. In the Asia-Pacific region, while real gross domestic product (GDP) growth will be a solid 4.7% this year, rising inflation poses a serious downside risk.