#ForexChief #inflation #forexnews #lockdowns #StockMarket #worldnews #forexmarket #AsianDevelopmentBank #GDP #Fed⠀
📊 Asia after the pandemic: inflation is normal, and it's strange⠀
💱 In almost all countries, last year was marked by extremely high inflation, which was caused by supply shortages, COVID lockdowns and attempts to return the economy to growth dynamics. All of these factors drive up consumer prices, but the standard economic logic does not work in Asia. The region emerges from the pandemic without speculative inflation and supply problems.
⠀
In China, Hong Kong, India, Indonesia, Vietnam, and the Philippines, annual inflation turned out to be below the average level over the past 10 years. Even where the rate was higher than before the pandemic (Malaysia, Singapore, South Korea, Taiwan), inflation does not exceed 2%.
⠀
Energy prices remain the main cause of inflation in Asia, the influence of other factors is minimal. China, Hong Kong, Taiwan introduced only a short lockdown, South Korea did without it at all. The high rates of vaccination of the region's population made it possible to keep price increases within a moderate framework. This helped maintain the supply/demand balance and avoid a sharp increase in pent-up demand after the restrictions were lifted. As a result, the economic negative from the lockdown turned out to be much weaker than in the US and Europe.
⠀
According to the forecasts of the Asian Development Bank, inflation in the developing countries of the region will decrease to 1.8-2.0% by the end of the year. The logistics of deliveries in Asia have been restored, the cost of food is decreasing, and the growth of economic activity contributes to active exports from the countries of the region.
⠀
Perhaps this is only a temporary phenomenon, but now inflation in Asia is lower, GDP is growing more actively, business is provided with orders from all over the world for several years to come, there is no political or other force majeure.
⠀
Despite moderate inflation, the Fed's rate hike will strengthen the dollar and cause import inflation, as monetary rates in major Asian countries brace for a correction.
⠀
Profits to y’all!