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Core Inflation Continued To Rise In October Keeping Central Banks On Alert

ASIA

CPI data has printed across Asia for October, except for Malaysia which is released on Friday. The results were mixed with some countries seeing a moderation in inflation while others saw it rise further. Non-Japan Asian central banks, ex China, are likely to continue tightening to combat price pressures and to defend their currencies while keeping their eyes on global growth.

  • Non-Japan Asian headline CPI inflation may have peaked in September as it moderated to 3.9% y/y in October from 4.4% the previous month, as commodity prices declined. China and its Covid restrictions are putting downward pressure on this number, as its October CPI printed at 2.1% y/y. When China is excluded from the aggregate it was an elevated 6% down from 6.4%.
  • Since Asian inflation has been boosted by higher global commodity prices, especially for energy, a lot of central banks are focusing on the second-round effects on underlying inflation from high headline. If we exclude China, non-Japan Asian core inflation continued to rise in October to 4.1% y/y from 3.9% last month, above most central banks’ targets.
  • We have used the IMF’s PPP weights to create an Asian aggregate.
Non-Japan Asia CPI y/y%

MNI - Market News/Refinitiv/IMF

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