Thailand
Inflation in Asean expected to moderate faster than in developed economies: Economist
KUALA LUMPUR: Inflation differs in various economies but in the Asean region it is expected to moderate and improved faster than the developed economies, said an economist.
ANZ Bank chief economist (Southeast Asia and India) Sanjay Mathur said inflation in the region was seen more as a result of a commodity price shock, and not due to the labour shortage which is rather acute in developed economies.
As for the measures taken by the economies to tackle inflation, it cannot be differentiated as the nature of inflation is different, he noted.
“The measures we need in Asean are different. Here it is more about enhancing food supply, hence in terms of provision in fiscal policy for example, it could be in terms of cash support to lower income groups.
“Whereas in the United States, the measures taken were more about curtailing demand that has taken place, therefore it was more through the interest rate cycle,” he told Bernama on the sidelines of the Asean Finance Innovation Summit here today.
On the monetary tightening exercise in the region, he noted that the bulk of the exercise was completed with only a few nations projecting for rate hikes. They include the Philippines and Thailand.
“As for Malaysia, we think Bank Negara Malaysia had already concluded its tightening cycle and there is no further need for it to do so
“Malaysia’s inflation is just a little over three per cent, which is quite manageable. As the year goes by, we think that inflation and growth will also slow somewhat so that will take a lot of pressure off,” he opined.
On another note, he said subsidies had undoubtedly played an important role in curtailing inflation in the country.
On moving into targeted subsidies as what the government planned to do, he said it would certainly push up prices.
“However that would be a one-time move and unless oil prices shoot up again. I think we will settle at a higher level for once and then it will come down again by next year,” he said.
Commenting on Malaysia’s pandemic measures, he lauded the income subsidy schemes by the government plus support to the corporate sector but over the longer term, the fiscal consolidation must continue to be strengthened, he added. –Bernama