News / Asia

    Inflation in Asia Reflects Rising Incomes, Falling Crop Production

    An Indian worker carries a sack of onions at a wholesale market in Hyderabad, India, Jan 22, 2011
    An Indian worker carries a sack of onions at a wholesale market in Hyderabad, India, Jan 22, 2011

    Multimedia

    Brian Padden

    Rising inflation in Asia has sparked concern that it could stifle economic growth in the region and the world.

    At a market in Jakarta the price of red chili peppers is almost double what it was last year. The increase causes concern here since peppers are a key ingredient in almost every Indonesian meal. But some consumers, like Jarwati, say they are adjusting.
    She says people who used to buy one kilo now only buy half a kilo. People who buy 250 grams, now they only buy 100 grams.

    Food prices are rising in much of Asia. Global prices for oil, iron, coal and other commodities also are rising.

    And in China property values are skyrocketing. Mr. Zhu owns an old apartment building in Beijing where units sell for 43,000 yuan per square meter, the equivalent of $6,500.

    He says the biggest change has definitely been price. It used to be a few thousand yuan per square meter, or even a few hundred, to now tens and hundreds of thousands.

    The small, one-bedroom apartments in his building are now selling for more than $350,000 each and are usually sold very quickly.

    Some economists worry that inflation could erode the purchasing power of Asia’s emerging middle class.  But securities analyst Nicholas Cashmore says in some Asian countries inflation reflects a rise in incomes and economic growth.

    "There's a lot of countries I think in the world today that would like inflation," said Cashmore.  "A modest inflation is always good because it represents that there is demand. And it represents a growing economy."

    He says in some Asian countries, like Indonesia, incomes have risen sharply in the past five years. These growing economies, he says, can handle an inflation rate of up to 5 percent. However, in some countries, including Indonesia, inflation now tops 6 percent a year.

    And even in countries with robust growth, such as Indonesia, India and China, rising food prices impose hardships. Nagesh Kumar is the chief economist for the United Nations Economic and Social Commission for Asia and the Pacific.  He says in Asia, 980 million people live on less than $1.25 a day, and most of their incomes go to food.

    "For them it means much more hardship, and then much lesser nutrition," said Kumar.  "And some of the people who are just above the poverty line, because of rising food prices, they may also be pushed into poverty.  So the result would be that under-nutrition, malnutrition increasing, and that leading to some health problems later on. So, this is a very serious problem for many Asian economies, especially in South Asian economies."

    In developed countries, such as South Korea, food accounts for a relatively small percentage of a household budget. But even for them, inflation creates political and economic headaches, which Kumar says governments will try to control. He says that could slow Asia’s strong recovery from the global financial crisis.

    "In 2010 they [Asian economies] recover rather well from the crisis," added Kumar.  "But now, central banks everywhere, you see that there is a trend that they are raising policy rates to curb the money supply. And that process is likely to affect the growth momentum."

    In recent months, central banks in China, Indonesia and elsewhere have raised interest rates to try to slow price increases.

    Rising commodity and energy prices mean more factories are producing more goods, which means there is economic growth in Asia and the world. But, Kumar notes, with crop failures in several parts of the world and falling investment in agriculture in much of Asia, food inflation may lead to suffering for many people and more problems for governments.

    You May Like

    Video Rubio Looks to Surge in New Hampshire

    Republican presidential candidate has moved into second place in several recent surveys and appears to be gaining ground on longtime frontrunner Donald Trump

    UN Calls for Global Ban on Female Genital Mutilation

    Recent UNICEF report finds at least 200 million girls and women alive today have undergone female genital mutilation in 30 countries

    UN Pilots New Peace Approach in CAR

    Approach launched in northern town of Kaga Bandoro, where former combatants of mainly Muslim Seleka armed group and Christian and animist anti-Balaka movement are being paid to do community work

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    German Artists to Memorialize Refugees With Life Jacket Exhibiti
    X
    Hamada Elsaram
    February 05, 2016 4:30 PM
    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video Former Drug CEO Martin Shkreli Angers US Lawmakers

    A former U.S. pharmaceutical business executive has angered lawmakers by refusing to explain why he raised the price of a life-saving pill by 5,000 percent. Martin Shkreli was removed from a congressional hearing on Thursday after citing his Fifth Amendment right to stay silent. Zlatica Hoke has more.
    Video

    Video Super Bowl TV Commercials are Super Business for Advertisers

    The Super Bowl, the championship clash between the two top teams in American Football, is the most-watched sporting event of the year, and advertisers are lining up and paying big bucks to get their commercials on the air. In fact, the TV commercials during the Super Bowl have become one of the most anticipated and popular features of the event. VOA's Brian Allen has a sneak peek of what you can expect to see when the big game goes to commercial break, and the real entertainment begins.
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Solar Innovation Provides Cheap, Clean Energy to Kenya Residents

    In Kenya, a company called M-Kopa Solar is providing clean energy to more than 300,000 homes across East Africa by allowing customers to "pay-as-you-go" via their cell phones. As Lenny Ruvaga reports from Kangemi, customers pay a small deposit for a solar unit and then pay less than a dollar a day to get clean energy to light up their homes or businesses.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.
    Video

    Video Apprenticeships Put Americans on Path Back to Work

    Trying to get more people into the U.S. workforce, the Obama administration last year announced $175 million in grants towards apprenticeship programs. VOA White House correspondent Aru Pande went inside one training center outside of Washington that has gained national recognition for helping put people on the path to employment.
    Video

    Video New Material May Reduce Concussion Effects

    As the 2016 National Football League season reaches its summit at the Super Bowl this coming Sunday (2/7), scientists are trying to learn how to more effectively protect football players from dangerous and damaging concussions. Researchers at Cardiff and Cambridge Universities say their origami-based material may solve the problem. VOA’s George Putic reports.
    Video

    Video Saudi Arabian Women's Sports Chip Away at Stereotypes

    Saudi Arabian female athletes say that sports are on the front line of busting traditions that quash women’s voices, both locally and internationally. In their hometown of Jeddah, a group of basketball players say that by connecting sports to health issues, they are encouraging women and girls to get out of their homes and participate in public life. VOA’s Heather Murdock reports.
    Video

    Video A Year Later, Fortunes Mixed for Syrians Forging New Lives in Berlin

    In April of last year, VOA followed the progress of six young Syrian refugees -- four brothers and their two friends -- as they made their way from Libya to Italy by boat, and eventually to Germany. Reporter Henry Ridgwell caught up with the refugees again in Berlin, as they struggle to forge new lives amid the turmoil of Europe's refugee crisis.
    Video

    Video Zika Virus May be Hard to Stop

    With the Zika virus spreading rapidly, the World Health Organization Monday declared Zika a global health emergency. As Alberto Pimienta reports, for many governments and experts, the worst is yet to come.