Asian Inflation: what’s happening in Indonesia and Pakistan?
Asian inflation has a high rate as a result of the demand and supply for credit, which raises the relative cost of money, or interest. There are some supply chain rate difficulties in Asia. They have not yet gone through marketing. Because of this, Asia has much lower supply-side flexibility than Europe. Due to several infrastructure-related problems, producers are unable to increase their supply as demand in Asia increases. Europe does not accept Thai cases. The inflation rate is the real cost of money or nominal interest.
Current interest rates are typically regarded to be slightly higher than the inflation rate. Interest rates remain high compared to Europe because Asia often has a high pace of inflation. According to peers, Indonesia’s inflation rate for July was “quite low,” and to control pricing pressures, the government would improve its coordination with the central bank, according to finance minister Sri Mulyani Indrawati. According to figures released earlier on Monday, annual inflation in July surged to 4.94 percent, the highest level in seven years and above Bank Indonesia’s goal range.
The statistics agency reported on Monday that Pakistan’s annual consumer price inflation increased to 24.9 percent in July from 21.3 percent in June, which was the highest level in 24 years. According to the report, non-food items—primarily fuel and power costs—were the main cause of the increase, with rising prices for wheat flour, milk, vegetables, pulses, and cooking oil also playing a significant role.
According to the agency, inflation increased by 4.3 percent month over month in July. With its foreign reserves rapidly running out, the rupee’s value relative to the dollar has historically declined. Inflation is out of control, and Pakistan is experiencing an economic crisis.
Asian inflation increased, and So did inflation in Europe
Few people in the majority of Western Europe spend less than 10% of their income on food. They must cut back on other expenses by 0.6% due to a 5% increase in food prices. Direct repercussions of conflict are more pressing for Eastern Europe, Russia, and Ukraine than food inflation, migrants, bombed homes, lost relatives, etc. Both nations are major exporters of food and the war’s restrictions on those exports. Some people’s concerns over lower production—are the primary causes of food inflation. Asian inflation is a harsh reality today.
Long-term, Asian economies are expanding quickly, and the middle class is expanding along with it. In anticipation of that, I think rents will only rise, making now the ideal time to buy since prices are likely to be the lowest they’ll ever be in modern times.
However, Asian rental markets behave very differently from US markets, and unlike the US, where it is simple to get historical and statistical data on any rental market nationwide, I am not aware of any such information being available in Asian nations. People begin investing in tangible assets when inflation exceeds current interest rates. rather than money or other things.
