The past few weeks have brought mostly good news on the inflation front, with the headline rate dropping back in most countries in November. Less encouragingly, however, core inflation has continued to rise and is now at multi-year highs in many parts of Asia. While it is likely to remain high by past standards, we expect core inflation to start dropping back over the coming months. “Reopening inflation” in sectors such as hotel stays and recreational activities should start to fall in early 2023 as the lower base begins to drop out of the annual comparison. Slower economic growth, which should help put downward pressure on wages, an easing of supply chain disruptions and lower shipping costs should also help ease upward pressure on prices. With underlying price pressures set to start easing soon and economic growth slowing, central banks across Asia are likely to bring their tightening cycles to an end in early 2023.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services