TOKYO: The world is experiencing a dramatic bout of inflation. The headline consumer price index in the United Kingdom and the United States have gone up by 6 per cent and 4 per cent, which has raised fears of a disastrous mistake by central banks and a return to the 1970 s chronic inflation.
The price rises are subdued across much of Asia. In China, the CPI is up 1.5 per cent compared with a year ago, while in Japan, inflation is roughly zero. In Australia, the headline CPI may be up by 3 per cent, but the underlying inflation of 2.1 per cent is at the bottom of the central bank's target range.
Only two big emerging markets in Asia have inflation above 5 per cent - Sri Lanka and Pakistan compared to many in Europe and South America. The global surge in inflation does not look global at all, as seen from Jakarta, Beijing or Tokyo.
Even though Asia imports a lot of energy, it has suffered the same jump in prices for oil, gas, coal and other commodities as everywhere else in the world.
Asia's inflation is mild and not severe comes down to one simple factor: It handled the COVID-19 pandemic better than the rest of the world.