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Inflation hits developing world

11/06/2008

invisible hit counter
The Wall Street Journal has an item on rising rates of inflation around the world.

Accompanying the article is this graphic:-

Some of these numbers are scary, look at the rate of increase for China from 1% in 2006 to 8% now.

The article states:-

Developing economies — some of which fought bruising battles to tame inflation in the 1980s and 1990s — seem particularly vulnerable. Many economists started the year worried that the biggest threat facing these economies was weaker growth, in the wake of the U.S. slowdown. Instead, inflation is turning out to be a potentially thornier problem.

Vietnam seems to be having a particularly difficult time with inflation running at possibly 25%.

One Comment
  1. 12/06/2008 09:45

    Agreed, global inflation is concerning – economists have been talking about it amongst each other for the past couple of years.

    The story isn’t so bleak when you slice out food and oil prices and look at how much productivity is increasing in many of these developing countries – the concern is if productivity growth peaks and these countries refuse to strongly tighten monetary policy their loose policy will spill over into the developed world (eg NZ!).

    There isn’t much the RBNZ could do about that – apart from hoping that the exchange rate adjusts to accommodate this change in the value of developing countries currencies.

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