Come 2020, the persistent impact of high shipping costs could put an end to the benign inflation Asia has enjoyed in 2021, an International Monetary Fund (IMF) blog post shared this week.
Analysis by IMF of the Baltic Dry Index, a benchmark measure of global shipping costs, shows that large increases in shipping costs boost inflation for 12 months, which could add about 1.5 percentage points to the pace of Asia’s inflation in the second half of 2022.
The agency cautioned that Asia’s tepid gains may witness greater momentum next year.
Meanwhile, as outlook remains uncertain, the IMF stated that central banks should stand ready to tighten policy if inflation pressures and expectations mount.
