Rapid declines in Indian wholesale price inflation have allowed policymakers to breathe somewhat easier. But the economy continues to grow rapidly and industrial activity appears again to be picking up. With money supply growth still too strong, inflation could easily take off again. Across the rest of the region, interest rates appear to have reached their cyclical peaks. In Korea, inflation is well under control, although concerns about credit growth persist. Elsewhere, particularly in Thailand and the Philippines, expectations of more interest rate cuts in the US are putting pressure on central bankers to follow suit.
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