EM core inflation weakest on record

The continued decline in core inflation across many emerging markets supports our view that most central banks’ easing cycles have further to run. Our measure of EM core inflation fell to 2.8% y/y last month, the weakest rate since our series began in 1996. The recent drop partly reflects large falls from very high rates in Turkey and Egypt. But over the past year, core price pressures have also eased across much of Emerging Asia, the Middle East, Africa and Latin America. The exception is Central & Emerging Europe, where core inflation is edging higher and central banks have less room to loosen policy.