Inflation in Asia has peaked, says Morgan Stanley

Asia’s inflation rate has peaked compared to other major economies such as the US and Europe, according to Morgan Stanley’s chief Asian economist.

Investment banker Chetan Ahya told CNBC’s “Squawk Box Asia” that “inflation has definitely peaked if you look at the data already showing it. It means you should see the risks,” he said. on monday.

“Average inflation in Asia peaked at 5.5% and has already fallen about 0.5% from that peak level. compared to,” he added.

Ahya said there were few signs of demand overheating in Asia. Especially since economic growth in most countries is still below pre-corona levels.

“The way I would describe the state of recovery in Asia is … that most economies are in the mid-cycle phase. I think the most important reason is to deeply restricted territory.”

Bank of Thailand Governor Setaput Stewartnaleput said last week that the country’s economy is expected to return to pre-pandemic levels by the end of the year, calling for the central bank to “bring out a large and bold rate hike.” said no.

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Morgan Stanley economists also said commodity demand was the main driver of inflation globally, especially in Asia.

“The pandemic in the United States caused a huge increase in demand for goods, creating a demand-supply imbalance. Did.

Banks expect demand for their goods to shrink in the coming months as supply chains improve and inventories rise. Moreover, labor markets in Asia are not as tight as they are in the United States, which has helped the region contain inflationary pressures, he added.

weak export growth

While inflation in Asia may appear relatively subdued, Wall Street banks said the outlook for exports remains weak.

“What we have to look at from an economic standpoint, in terms of the impact on growth, is that real and real numbers have already slowed to about 1% to 3% year-on-year,” Arya said.

“This was growing at about 10% plus just about 12 months ago.

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