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Economy in Brief

 Inflation Trends in Asia, ex Japan  
by Louise Curley June 25, 2007

Consumer Price Indexes for four countries--China, India, Singapore and Vietnam--were released today and can be found in the Haver Data Base. EMERGEPR, together with similar data for other Asian nations. Data are available, through May, except for India.

Inflation, as measured by the year to year increase in the Consumer Price Index, has varied widely in the various countries of Asia. Inflation in the first five months of this year are shown for selected Asian countries in the table below, together with the annual rates for 2004, 2005 and 2006.

Deflationary tendencies that were evident in the Greater China Area appear to have lessened in Hong Kong and China, but still persist in Taiwan. These trends are shown in the first chart.

Among the high inflation countries, Vietnam, Indonesia and India, for example, inflation in Vietnam after decelerating somewhat last year has increased in the current months of this year. Inflation in India has trended upward since mid 2005. Inflation in Indonesia jumped in late 2005 as a result of natural disasters and fell precipitately in late 2006. Inflation there is now moderately below the levels reached in early 2005 and no clear trend is apparent, as can be seen in the second chart.

The third chart shows the course of inflation in countries that have experienced moderating inflation in recent years. Thailand, like Indonesia experienced exceptionally high inflation in late 2005 and early 2006 followed by a sharp fall later in the year. Among these countries inflation in Singapore and, to a lesser extent, in South Korea is trending upward.

INFLATION IN ASIA Y/Y % CHANGE IN CPI  May 07 Apr  07  Mar 07  Feb  07  Jan 07  2006 2005 2004
China 3.42 3.05 3.33 2.75 2.21 1.71 1.78 3.78
Hong Kong 1.27 1.27 2.36 0.79 1.97 2.02 0.91 -0.38
Taiwan -0.03 0.67 0.84 1.74 0.35 0.60 2.31 1.61
Vietnam 7.22 7.07 6.70 6.48 6.43 7.39 8.28 7.76
Indonesia 6.01 6.29 6.22 6.30 6.26 13.10 10.46 6.06
India n.a. 6.67 6.72 7.56 6.72 6.18 4.24 3.77
South Korea 2.35 2.45 2.16 2.17 1.68 2.24 2.75 3.59
Singapore 1.09 0.59 0.79 0.59 0.20 0.96 0.47 1.67
Thailand 1.91 1.84 2.04 2.32 3.05 4.64 4.54 2.77
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