RBI Policy: Inflation surges across the globe; Asia prices zoom

[K.Karthik Raja]

RBI Policy: Inflation surges across the globe; Asia prices zoom
Tuesday, Jul 29
MUMBAI - Multi-year highs have been broken, but none of the
countries would like to be at the forefront of this inflation race.
Data compilation of inflation levels in 31 countries in June by
showed inflation in Kenya was the highest at 29.26%, followed by
Sri Lanka at 28.2%.
New record highs in inflation were mostly seen in key Asian
countries.
Among Asian countries, inflation in Sri Lanka and Pakistan jumped
the highest, with consumer price inflation in these countries topping
20% in the month of June.
India's inflation situation was slightly better than that of its
immediate
neighbours. Average WPI in India for June was about 11.35%. The
country's WPI was a little below the 12% mark in the week to Jul 12 at
11.89%--the most recent figure available.
India's wholesale price index was the third highest among its key
Asian peers, data showed.
India uses weekly WPI data to measure headline inflation, while
most other countries use Consumer Price Index.
Inflation based on CPI for agricultural labourers in India was
8.77% in June.
Close on the heels of India, were Philippines and Indonesia.
Consumer price inflation in Philippines surged to a 14-year high of
11.4%, while Indonesian CPI hit 11.03%, a level last seen two years
ago.
Thailand and Japan saw inflation soaring to 10-year highs last
month, while Malaysia's inflation jumped to a 27-year high of 7.7%.
South Korea's CPI in June was at 5.5%, a level not seen in a decade.
In contrast to most Asian countries, China's inflation slipped to
7.1% in June from the 11-year high of 8.7% seen in February.
Developed economies like U.K. detailed CPI at an 11-year high of
3.8%, while Eurozone CPI scaled to a new record of 4%. Consumer prices
in U.S. surged to levels last seen 26 years ago.
Among other European countries, Switzerland's inflation rose to a
15-year high of 2.9% last month, while Danish CPI rose to a 24-year
high of 3.8%.
A combination of elevated energy, food and metal prices have
pushed up inflation rates globally.
Policy makers in India could take some solace from the fact that
they are not lone rangers in their fight against inflation.

Following are key inflation rates of major countries and their
respective
interest rates.
.
.
Country Key interest rate WPI/CPI Inflation
(in percent) (in percent)
.
.
Kenya 9.00 29.26(June)
Sri Lanka 10.50 28.2 (June)
Pakistan 12.00 21.5 (June)
Egypt 20.2 20.2 (June)
Russia 11.00 15.10(June)
India 8.50 11.89(Jul 12 wk)
South Africa 12.00 11.7 (May)
Philippines 5.75 11.4 (June)
Indonesia 8.75 11.03(June)
Argentina 10.75 9.3 (June)
Thailand 3.50 8.9 (June)
Malaysia 3.50 7.7 (June)
Singapore 0.38 7.5 (June)
Bangladesh 13.89 7.4 (May)
China 7.47 7.1 (June)
Hong Kong 3.50 6.1 (June)
Brazil 13.00 6.06(June)
Mexico 8.00 5.4 (June)
US 2.00 5.0 (June)
Taiwan 3.63 4.97(June)
South Korea 5.00 5.5 (June)
Israel 3.75 4.8 (June)
Sweden 4.50 4.3 (June)
Australia 7.25 4.5 (Jan-Jun)
New Zealand 8.25 4.0 (Jan-Jun)
Eurozone 4.25 4.0 (June)
Denmark 4.60 3.8 (June)
UK 5.00 3.8 (June)
Switzerland 2.25-3.25 2.9 (June)
Canada 3.00 3.1 (June)
Japan 0.50 2.0 (June)
.
K.Karthik Raja.