Darn Them Piggies! Pork Prices & the Inflation Outlook for China


By Nigel Chalk

(Version in 中文)

It was pretty clear to me on a recent visit that China has become one of the biggest global markets for Angry Birds. The game was everywhere and around 100 million Chinese downloads are expected this year. It made me wonder if this was somehow linked to rising concerns over inflation and a way of getting back at those (increasingly expensive) mischievous green pigs.

During the past year, views on China’s economy have yo-yoed from concerns about the recovery, to hand-wringing about inflation and overheating, and then back to talk of hard landing.

Certainly inflation has been a key feature of the environment this year in China and one should pay close attention to it. Rising inflation is a crucial social concern and takes a heavy toll on household incomes that are already struggling to keep up with economic growth. Continue reading

Keeping Asia from Overheating


By Anoop Singh

Asia’s vigorous pace of growth has seen the region play a leading role in the global recovery. But, there are also now growing signs of price pressure across the region’s goods and asset markets.

Headline inflation in Asia has accelerated since October 2010, mainly owing to higher commodity prices. There are, of course, variations in how much this has affected inflation across Asia, partly reflecting differences in the shares of food and energy items in expenditures.

But there are signs that higher commodity prices are spilling over to a more generalized increase in inflation. Continue reading

Asia: The Challenge of Capital Inflows


By Anoop Singh

As I have highlighted in previous posts, Asia has been leading the global recovery and it is expected to continue doing so in the near term.

Not only has Asia’s rapid growth helped output return to pre-crisis levels relatively quickly, it has attracted large capital inflows into the region. Foreign capital has poured in, attracted by Asia’s strong fundamentals and bright growth prospects. Portfolio and cross border banking flows have rebounded sharply as financial conditions normalized.

Looking ahead, our growth projections suggest that Asia is expected to outperform advanced countries. As a result, the region is likely to continue to attract significant capital inflows, assuming that fallout from the euro zone sovereign debt crisis is contained and that the recent spike in global risk aversion abates.

Continue reading

Follow

Get every new post delivered to your Inbox.

Join 769 other followers

%d bloggers like this: