Skip to content

Core Inflation in Asia Shows Signs of ‘Manageable Stickiness’

Labor markets aren’t feeling the same strain of workers shortages that other developed economies are, which will also ease pressure on core inflation.

Labor markets aren’t feeling the same strain of workers shortages that other developed economies are, which will also ease pressure on core inflation.

Photographer: Maika Elan/Bloomberg

Core inflation across Asia likely won’t be as long lasting as in other parts of the world, allowing policy makers to focus on slowing growth as headline price pressures cool, according to Fred Neumann, chief Asia economist at HSBC Holdings Plc.

“Across the region, monetary officials may thus ‘look through’ the current spike in headline CPI readings, and begin to worry more about the looming slowdown in global growth,” Neumann said. “The correlation between food and energy prices on the one hand, and core prices on the other, is often lower than it is in the West where ‘core stickiness’ may pose a particularly acute problem.”