Asian Consumer Price Inflation Figures Are Extreme

The Asian countries present a very wide range of inflation numbers. Moody’s Analytics forecasts indicate that Taiwan will post a figure of less than 2% for its August consumer price inflation. Taiwan belongs to that group of Asian economies where the prices remain under check as against the Latin American and African nations. Likewise, another small nation Brunei posted the world’s lowest inflation figure of -0.7% last year.

According to the economist, Ma Tieying working at DBS Bank in Singapore, “We don’t see demand-pull price pressures in most Asian countries, given that GDP growth there is running slightly below or close to the potential rate.

Let us see how these inflation figures indicate the underlying economic change in some of these Asian nations.

Japan is a hyper-developed Asian country, which had a negative inflation figure from 2009-2012. This year too, it has logged its inflation figures below 1% month after month. The IMF feels that the monetary policy of the country does not have the potential to stimulate the economy now.

While the Chinese inflation spiked to 6.58% in 2007 and was still around 4.57% in 2010, the figures in July this year is mere 1.4%. Last year too, it was just 2% and the Chinese government actually wants it to touch 3% this year. With a $11.2 trillion economy, the government feels that low numbers will lead to low demand as the manufacturers are not passing on the benefits to the consumers.

The faster-growing economy of India posted a number of 12.27% in November 2013, which has now come down to 2.2% in June. In the past few years, inflation was high due to natural calamities like droughts and floods.

Source: Forbes

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