{
  "title": "Higher Shipping Costs May Lift Asia’s Low Inflation",
  "publication": "IMF Blog, December 22, 2021",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2021/12/22/higher-shipping-costs-may-lift-asias-low-inflation",
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  "summary": "Asia’s inflation has been more moderate compared with other regions, giving central banks room to keep interest rates low and support recovery.",
  "sections": [
    {
      "heading": "Key findings on Asia’s recent inflation dynamics",
      "content": "- Asia’s inflation has been more moderate compared with other regions, giving central banks room to keep interest rates low and support recovery.\n- Among Asia’s emerging economies, a delayed recovery has kept core inflation—which strips out volatile food and energy costs—running at half the rate of peers in other regions.\n- Food costs, which make up about one third of the consumer price index baskets, grew 1.6 percent over the past year in Asia, versus 9.1 percent in other regions.\n- Asia’s advanced economies experienced lower inflation in part because of more muted energy inflation compared with Europe and the United States.\n- Some Asian countries avoided major supply disruptions through pandemic responses (examples cited: Korea’s comprehensive contact tracing and testing; Australia and China’s border closures and localized lockdowns)."
    },
    {
      "heading": "Analysis of shipping costs and inflation transmission",
      "content": "- Global shipping costs have surged: one benchmark measure, the Baltic Dry Index, tripled this year through October.\n- The analysis finds that large increases in shipping costs boost inflation for 12 months.\n- Projection: the persistent impact of high shipping costs could add about 1.5 percentage points to the pace of Asia’s inflation in the second half of 2022."
    },
    {
      "heading": "Outlook and policy implications",
      "content": "- Broad inflationary pressures are expected to eventually moderate globally as supply-demand mismatches ease and stimulus recedes.\n- However, in 2022, as the recovery strengthens, high shipping costs could end the benign inflation environment Asia experienced in 2021.\n- Policy recommendation: the region’s policymakers must be ready to act; central banks should be prepared to tighten policy if inflation pressures and expectations mount.\n\nSource: \"Higher Shipping Costs May Lift Asia’s Low Inflation\", IMFBlog, December 22, 2021 — https://www.imf.org/en/blogs/articles/2021/12/22/higher-shipping-costs-may-lift-asias-low-inflation\n\n---\n\n\n References\n\n- advanced\n- emerging\n- https://www.imf.org/wp-content/uploads/2021/12/COTW-Asia-shipping-chart.jpg\n- Asian countries managed the pandemic\n\nSource: https://www.imf.org/en/blogs/articles/2021/12/22/higher-shipping-costs-may-lift-asias-low-inflation"
    }
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    "Authors: Yan Carrire-Swallow, Pragyan Deb, Daniel Jimenez",
    "Published: December 22, 2021",
    "Asia’s inflation has been more moderate compared with other regions, giving central banks room to keep interest rates low and support recovery.",
    "Among Asia’s emerging economies, a delayed recovery has kept core inflation—which strips out volatile food and energy costs—running at half the rate of peers in other regions.",
    "Food costs, which make up about one third of the consumer price index baskets, grew 1.6 percent over the past year in Asia, versus 9.1 percent in other regions.",
    "Asia’s advanced economies experienced lower inflation in part because of more muted energy inflation compared with Europe and the United States.",
    "Some Asian countries avoided major supply disruptions through pandemic responses (examples cited: Korea’s comprehensive contact tracing and testing; Australia and China’s border closures and localized lockdowns).",
    "Global shipping costs have surged: one benchmark measure, the Baltic Dry Index, tripled this year through October.",
    "The analysis finds that large increases in shipping costs boost inflation for 12 months.",
    "Projection: the persistent impact of high shipping costs could add about 1.5 percentage points to the pace of Asia’s inflation in the second half of 2022.",
    "Broad inflationary pressures are expected to eventually moderate globally as supply-demand mismatches ease and stimulus recedes.",
    "However, in 2022, as the recovery strengthens, high shipping costs could end the benign inflation environment Asia experienced in 2021.",
    "Policy recommendation: the region’s policymakers must be ready to act; central banks should be prepared to tighten policy if inflation pressures and expectations mount.",
    "[advanced](https://blogs.imf.org/2021/12/03/addressing-inflation-pressures-amid-an-enduring-pandemic/)",
    "[emerging](https://blogs.imf.org/2021/11/16/latin-americas-inflation-challenge/)",
    "[https://www.imf.org/wp-content/uploads/2021/12/COTW-Asia-shipping-chart.jpg](https://www.imf.org/wp-content/uploads/2021/12/COTW-Asia-shipping-chart.jpg)",
    "[Asian countries managed the pandemic](https://blogs.imf.org/2020/10/21/engines-not-yet-in-sync-a-multispeed-recovery-in-asia/)"
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