Consumer Prices in Emerging Countries - Currency Changes vs US$ and Euro

Inflation in Emerging Countries Monthly Report

Inflation rates remain under control in low-income economies, with rare exceptions like Turkey, Sri Lanka or Egypt. Consumer prices could rise at a higher pace in 2018, in line with a stronger economic growth predicted by economists. Our monthly report offers a comparison of inflation rates in low-cost countries, with historical data available back to June 2007. Impact of currency changes vs the US dollar, the euro and the Sterling is also calculated to assess real terms of trade for exporters.

Inflation rates have remained under control in most emerging countries in November, with a few exceptions.

A relatively stronger economic growth of the world economy in 2018 could slightly push up inflation rates here and there.

In Turkey, the consumer price index (CPI) has further climbed in November, now reaching 13%.

This is an astronomic level if compared with other emerging economies, but Turkey has also released a very strong economic data and the fall of the currency could partly offset the jump of consumer prices.

In our below model taking into account currency variations, Turkey's CPI is reduced to only 1.7% in UK pound terms with prices even falling 1.7% in euro terms.

Turkish exports should therefore stay strong in the coming period.

Another country confronted with higher inflation rates is Sri Lanka where food prices have surged, pushing up inflation somewhere between 6% and 7% in the past months.

Wages are already very high in Sri Lanka by contrast with other South Asian countries, however, meaning that higher inflation should not necessarily mean higher wages and export prices, as a result.

In Egypt, inflation has begun falling, although still at a very high level of 26%.

The decline of the lira is no more offsetting the jump of consumer prices and any rise in nominal wages could negatively affect exports, as far as labor-intensive industries are concerned.

In India, demand remains relatively affected by the modernization process of the past twelve months, meaning that inflation stays moderate by national standard.

The CPI could rise from an average of 3.7% in 2017 up to 4.6% in the next year, according to latest forecast from the Asian Development Bank (ADB).

Vietnam could also experience a stronger inflation in 2018, rising from 4% to 5.5%.

Download our comprehensive data (.csv file)


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