While last week’s commodities sell off may stall price hikes in the long term, stubborn inflation continues to vex policymakers and consumers around the world.
In India, the Wall Street Journal reports that a senior official for the International Monetary Fund is warning that food and energy price disruptions may have a significant effect on the inflation and growth outlook. Last month, inflation and subsequent tightening of India’s monetary policy prompted the IMF the downgrade that country’s growth forecast for 2011 to 8.2% from 8.4%; meantime, consumer prices are expected to increase by 7.5% this year.
According to Bloomberg columnist William Pesek, the inflation battle is one that Asian countries on the whole will lose if central banks don’t react more aggressively. “Rather than yanking away the proverbial punchbowl, they are keeping the monetary taps open for too long and imperiling Asia’s outlook,” he asserts. “Asia needs less talking about the risks, and more doing.”
In the U.S., meanwhile, inflation observers are on high alert with reports on consumer and producer prices for April expected this week. The Globe and Mail reports that experts are anticipating a 0.4% jump in CPI and a 0.6% hike in PPI.
On this side of the border, Loblaws CEO Allan Leighton warned that further inflation in food prices could eat into company’s bottom line. (Though first-quarter sales fell, the grocery giant reported a 23% increase in profits to $162 million from a year earlier.) Meantime, members of the apparel industry are preparing to voice their concerns over the price of cotton, which has increased by 70% in the last year. On May 10, Oakville, Ont.-based Entripy Custom Clothing is staging something called a “flash mob tug of war” at three Toronto locations to “raise awareness of the rising price of cotton and its impact on Canadian consumers and the apparel industry.”