Global inflation is up 4.3% this year, which has given many parts of the world to feel inflation that was not present for several decades. Asia has not yet been hit so hard by global inflation but is now seeing an increase not seen in 10 years.
According to analysts, inflation in Asia could rise to a high in 2022. This could be costly for much of Asia, as income levels in Asia range from high to low. This ranges from Singapore where the income level is high to Cambodia or Laos where the income level is low.
The inflation rate in China rose by 2.3% in November. Singapore saw an increase of 3.2%, South Korea 3.7%, India 4.91%, Taiwan 2.84%, Thailand 2.71, and Malaysia 2.9%. The lower-income countries are hit harder with Myanmar seeing an increase of 6.51%, Laos 4.72%, and the Philippines with 4.2%.
Inflation is here to stay as global supply chains are likely to be impacted again by the rapidly spreading Omicron variant. In addition, some countries have again introduced stricter entry restrictions, such as Thailand, which announced yesterday to ban quarantine-free entry for the time being.
These circumstances make it difficult for countries to tighten monetary policy, as this could affect the local economy. On the other hand, inflation must not be allowed to get out of control, since a large part of the population can no longer afford food.