The recent rise in China’s inflation has grabbed attention of the public and policymakers alike. Consumer price inflation rose to 5.1% in November. This is higher than we are used to in China, although it is modest in an emerging market perspective. To determine the best policy response to the rise in inflation it is important to know its cause and how much inflation we should expect in the coming 12 months. It is also good to decide what an acceptable rate of inflation is for a country like China.
Remember the food and fuel crisis that preceded the global economic and financial meltdown? Many in the advanced economies have long forgotten it; people in developing countries have very vivid memories. Are we about to relive the crisis?
Compare South Korea and Malaysia in 1970 and compare them again in 2009. South Korea was a third poorer back then and is now three times richer. Even more remarkable has been South Korea’s ability to widely share the benefits of this spectacular feat across broad segments of society. South Korea’s strong focus on broad-based human capital development allowed the country to transform itself into a high-income economy, while at the same time reducing income inequality and improving social outcomes.
Amid the robust recovery from the global economic and financial crisis, policymakers in East Asia are contending with two emerging challenges: rising inflation and surging capital inflows. The quickening of the pace of price increases would require further monetary tightening, but many officials and analysts worry that such tightening will help support further flows. On balance, central banks in the region seem to have been rather patient in raising p
As a follow up event to the recent release of the Bank'slatest East Asia and Pacific economic update, our lead economists spent around 1 1/2 hours this Tuesday answering your questions on the findings of the report, and other economic issues.
A couple of weeks ago the Bank released its half-yearly economic assessment of developing countries in the East Asia and Pacific region. The report confirmed the robust recovery of the region's economies overall, but flagged a number of emerging risks, particularly around the return of large capital inflows and appreciating currencies.
According to many commentators, setting the global economy on a right path these days must include a sharp increase in private consumption in East Asia. Consumption, these analysts argue, is very low across the region, and levels nearer those in advanced economies are more appropriate.
This does not seem right. Consider the following points:
To a tourist visiting Cambodia, or to a French consumer living in Cambodia (whose food habits require a complement of pasta and potatoes), rice will mainly mean the stunning landscapes of rice fields, yellow at harvest time, bright and liquid during the rainy season, with shades of green meanwhile.