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Spike in inflation nothing to worry about

The sharp rise in headline inflation across Emerging Asia is unlikely to be the trigger for the region’s central banks to start tightening monetary policy. The increase is almost entirely due to an acceleration in energy price inflation, which has been pushed higher by “base effects” caused by the sharp drop in oil prices at the start of last year. These effects look set to fade over the coming months, leaving central banks free to focus on supporting growth.

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