RIDING THE TIDE: Photo shows a consumer purchasing vegetables at a market. The report says that inflation is expected to remain subdued in most of East Asia, but is still a concern for most countries in South Asia.
KUCHING: Inflation rates remain subdued in most developed economies as continuing large output gaps and downward pressure on wages in many countries are keeping inflationary expectations low.
According to the World Economic Situation and Prospects 2013 by the United Nations (UN), inflation in the US moderated over 2012, down to about two per cent from 3.1 per cent in 2011.
The report opined that a further moderation in headline inflation was expected in the outlook for 2013.
“In the euro area, headline inflation, as measured by the Harmonised Index of Consumer Prices (HICP), continues to be above the central bank’s target of two per cent,” noted the report.
Core inflation, which did not include price changes in volatile items such as energy, food, alcohol and tobacco, had been much lower at around 1.5 per cent, with no evidence of upward pressures, it added.
Inflation was expected to drift down slowly. Inflation in the new EU members was also expected to lessen. Deflation continued to prevail in Japan, although the central bank had raised its inflation target to boost inflation expectations.
Inflation receded in a majority of developing countries during 2012, but remained stubbornly high in some. Higher oil prices and some country-specific supply-side constraints might continue to put upward pressure on inflation in developing countries in 2013 and into 2014, the report elaborated.
“In Africa, while inflation moderated in many economies, the rate of inflation is still above 10 per cent in Angola, Nigeria and elsewhere.
“Inflation is expected to remain subdued in most of East Asia, but is still a concern for most countries in South Asia where inflation rates were, on average, over 11 per cent in 2012 and are forecast to remain above or near 10 per cent in 2013 and 2014,” it added.
Inflation remained low in most economies in West Asia, though it was still high (above 10 per cent) in Yemen and very high (30 per cent) in the Syrian Arab Republic.
The inflation rate in Latin America and the Caribbean was expected to stay at about six per cent.