New Delhi: Inflation in Asia Pacific economies is expected to subside earlier as commodity prices retreat, but country-specific factors could lead to different inflation outcomes, said Moody's Analytics. A combination of factors like the extreme weather, the Covid-19 pandemic, lockdowns in China, and the Russian invasion of Ukraine resulted in distorting the global supply chain and inflation, Moody's Analytics said in a commentary. In a commentary, Moody's Analytics said high inflation is troubling because rising prices erode purchasing power and add to input costs.


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"In 2022, it also exacerbates anxiety within businesses and households that have already survived two turbulent years," Moody's Analytics said. Many central banks in the Asia-Pacific region have price stability among their mandates and are scrambling to pull inflation back from multi-year highs by tightening monetary policy. (Also Read: Gold prices climb higher by Rs 200, check rates of yellow metal in your city)


According to Moody's Analytics, inflation will subside relatively quickly in the region as commodity prices retreat, but country-specific factors could lead to different inflation outcomes. (Also Read: Sri Lanka warns public not to use cryptocurrencies amid economic upheaval)


"Our baseline assumption is that energy and food prices peak in the next few months and then trend lower; this assumes that the military conflict in Ukraine does not escalate," Moody's Analytics said.