As price increases became more broad-based, Australian core inflation sped to its fastest annual pace since 2015 in the September quarter. It's a major surprise that led markets to price in earlier hikes in interest rates.

Australia core inflation jumps to six-year high in Q3

Asian markets were mixed Monday following last week's gains with investors keeping a worried eye on a fresh Covid outbreak in China that could drag on the already stuttering economy.

Long-running worries about inflation continued to cast a shadow over trading floors, though a healthy batch of earnings have tempered those concerns in the past couple of weeks.

Reporting by tech titans including Amazon, Apple, Samsung and Microsoft are on the agenda this week, and will be closely followed for an idea about what impact supply chain snarls and rising prices is having on their bottom lines.

Their forward guidance will also be of interest as they contemplate tighter central bank monetary policies and a possible hike in interest rates next year. Tech firms are usually more susceptible to higher borrowing costs.

News that troubled China Evergrande had paid interest due on a bond before Saturday's deadline provided a much-needed boost to confidence though it remains to be seen whether it can meet obligations on other notes due before the end of the year.

Hong Kong and Shanghai fluctuated through the early session, with traders keeping tabs on the latest Delta variant outbreak in mainland China, which comes just over three months before the country hosts the Winter Olympics.

Also Read |&nbsp;<a href="https://www.wionews.com/business-economy/hong-kong-stock-exchange-halts-trading-of-evergrande-shares-418036">Hong Kong Stock Exchange halts trading of Evergrande shares</a>

The latest spike has forced authorities to reimpose strict containment measures, but there are fears of a wider lockdown which would weigh on economic growth. Recent outbreaks this year played a role in the below-par expansion seen in the third quarter.

There were gains in Sydney, Seoul and Jakarta but Tokyo, Singapore, Taipei and Manila fell.

Traders are preparing for the Federal Reserve to join several other central banks around the world in winding down the massive financial support put in place at the outset of the pandemic.

Boss Jerome Powell said last week that the bank's vast bond-buying should now be tapered, with expectations he will begin the pullback as early as next month, though he was not ready to hike borrowing costs yet.

"The risks are clearly now to longer and more persistent bottlenecks, and thus to higher inflation," he said Friday.

"I would say our policy is well-positioned to manage a range of plausible outcomes," he said. "I do think it's time to taper and I don't think it's time to raise rates."

Oil prices pressed higher, with Brent at a three-year high above $86, while WTI was within sight of $85 for the first time since October 2014.

The latest rise comes after Saudi Arabia said OPEC and other major producers would be cautious in lifting output despite surging demand, warning that the pandemic still posed a threat to the outlook.

The Turkish lira tumbled more than one percent against the dollar after President Recep Tayyip Erdogan called for the expulsion of ambassadors from 10 countries, including Germany and the United States, who had appealed for the release of a jailed civil society leader.

Key figures around 0230 GMT&nbsp;

Tokyo - Nikkei 225: DOWN 1.0 percent at 28,520.35 (break)&nbsp;

Hong Kong - Hang Seng Index: FLAT at 26,121.47

Shanghai - Composite: UP 0.1 percent at 3,584.05

Euro/dollar: DOWN at $1.1645 from $1.1648 at 2050 GMT on Friday

Pound/dollar: UP at $1.3771 from $1.3759

Euro/pound: DOWN at 84.56 pence from 84.70 pence&nbsp;

Dollar/yen: UP at 113.70 from 113.46 yen

West Texas Intermediate: UP 1.0 percent at $84.59 per barrel

Brent North Sea crude: UP 0.8 percent at $86.17 per barrel&nbsp;

New York - Dow: UP 0.2 percent at 35,677.02 (close)

London - FTSE 100: UP 0.2 percent at 7,204.55 (close)

Asian markets were mixed Monday following last week's gains with investors keeping a worried eye on a fresh Covid outbreak in China that could drag on the already stuttering economy.

Asian markets were mixed Monday following last week's gains with investors keeping a worried eye on a fresh Covid outbreak in China that could drag on the already stuttering economy. Long-running worries about inflation continued to cast a shadow over trading floors, though a healthy batch of earnings have tempered those concerns in the past couple of weeks. Reporting by tech titans including Amazon, Apple, Samsung and Microsoft are on the agenda this week, and will be closely followed for an idea about what impact supply chain snarls and rising prices is having on their bottom lines. Their forward guidance will also be of interest as they contemplate tighter central bank monetary policies and a possible hike in interest rates next year. Tech firms are usually more susceptible to higher borrowing costs. News that troubled China Evergrande had paid interest due on a bond before Saturday's deadline provided a much-needed boost to confidence though it remains to be seen whether it can meet obligations on other notes due before the end of the year. Hong Kong and Shanghai fluctuated through the early session, with traders keeping tabs on the latest Delta variant outbreak in mainland China, which comes just over three months before the country hosts the Winter Olympics. Also Read | Hong Kong Stock Exchange halts trading of Evergrande shares The latest spike has forced authorities to reimpose strict containment measures, but there are fears of a wider lockdown which would weigh on economic growth. Recent outbreaks this year played a role in the below-par expansion seen in the third quarter. There were gains in Sydney, Seoul and Jakarta but Tokyo, Singapore, Taipei and Manila fell. Traders are preparing for the Federal Reserve to join several other central banks around the world in winding down the massive financial support put in place at the outset of the pandemic. Boss Jerome Powell said last week that the bank's vast bond-buying should now be tapered, with expectations he will begin the pullback as early as next month, though he was not ready to hike borrowing costs yet. "The risks are clearly now to longer and more persistent bottlenecks, and thus to higher inflation," he said Friday. "I would say our policy is well-positioned to manage a range of plausible outcomes," he said. "I do think it's time to taper and I don't think it's time to raise rates." Oil prices pressed higher, with Brent at a three-year high above $86, while WTI was within sight of $85 for the first time since October 2014. The latest rise comes after Saudi Arabia said OPEC and other major producers would be cautious in lifting output despite surging demand, warning that the pandemic still posed a threat to the outlook. The Turkish lira tumbled more than one percent against the dollar after President Recep Tayyip Erdogan called for the expulsion of ambassadors from 10 countries, including Germany and the United States, who had appealed for the release of a jailed civil society leader. Key figures around 0230 GMT Tokyo - Nikkei 225: DOWN 1.0 percent at 28,520.35 (break) Hong Kong - Hang Seng Index: FLAT at 26,121.47 Shanghai - Composite: UP 0.1 percent at 3,584.05 Euro/dollar: DOWN at $1.1645 from $1.1648 at 2050 GMT on Friday Pound/dollar: UP at $1.3771 from $1.3759 Euro/pound: DOWN at 84.56 pence from 84.70 pence Dollar/yen: UP at 113.70 from 113.46 yen West Texas Intermediate: UP 1.0 percent at $84.59 per barrel Brent North Sea crude: UP 0.8 percent at $86.17 per barrel New York - Dow: UP 0.2 percent at 35,677.02 (close) London - FTSE 100: UP 0.2 percent at 7,204.55 (close)

Asian markets swing as traders eye China outbreak, inflation

Amid record fuel prices, France has announced to provide €100 “inflation bonus” to the people on low to middle incomes and promised to freeze petrol prices in a bid to contain growing discontent over rising prices and an increase in living costs.

“We obviously want to protect French people, above all those who work hard and are taking the full force of these price rises,” said the government spokesperson, Gabriel Attal.

The announcement comes in the backdrop of impending presidential elections which is about to take place in six months. Experts argue that President Emmanuel Macron is seeking to limit damage to his economic record from spiralling energy prices.

Also read |<a href="https://www.wionews.com/world/watch-uk-fuel-crisis-as-people-wait-in-queues-man-rides-horse-into-gas-station-mocks-those-waiting-to-fill-up-on-fuel-417393">&nbsp;UK Fuel crisis, as people wait in queues, man rides horse into gas station, mocks those waiting to fill up on fuel</a>

The country’s prime minister, Jean Castex, said the one-off “inflation payout” would be given to all those earning less than €2,000 net a month, including private and public sector workers, the self-employed, job seekers and retired people. Distribution of the money would begin at the end of December.

Also read |&nbsp;<a href="https://www.wionews.com/world/macron-targets-radical-islam-in-france-with-massive-and-unprecedented-measures-347310">Macron targets radical Islam in France with 'massive and unprecedented' measures</a>

Castex said it would affect about 38 million people, and petrol prices would also be “frozen for the whole of 2022”.

He added that the €2000 threshold would be calculated per person, not per household, and that the government would stick to its 2022 budget deficit target of 5 per cent of GDP by compensating the payout with new income and budget savings.

As petrol prices steadily climbed in recent weeks, the government faced growing pressure to cut taxes paid at the pump, which can amount to up to 60 per cent of what drivers pay.

Also read |&nbsp;<a href="https://www.wionews.com/trending/watch-from-egg-and-slap-to-macron-to-flying-shoe-at-george-w-bush-when-world-leaders-were-at-the-receiving-end-390283">From egg, and slap, to Macron to flying shoe at George W Bush — When world leaders were at the receiving end</a>

The payout comes just before the three-year anniversary of the anti-government gilets jaunes or yellow vests protests that began in autumn 2018 as a motorists’ revolt against fuel tax.

Last weekend, small protests were held by gilets jaunes on roundabouts in some rural areas and small towns. The government is keen to stave off this escalating into fuel blockades or growing street marches.

Finance minister Bruno Le Maire argued that step would be costly to public finances and would also amount to a subsidy for fossil fuels at a time when the government was trying to wean the economy off them.

(With inputs from agencies)

Amid record fuel prices, France has announced to provide €100 “inflation bonus” to the people on low to middle incomes and promised to freeze petrol prices in a bid to contain growing discontent over rising prices and an increase in living costs.

Amid record fuel prices, France has announced to provide €100 “inflation bonus” to the people on low to middle incomes and promised to freeze petrol prices in a bid to contain growing discontent over rising prices and an increase in living costs. “We obviously want to protect French people, above all those who work hard and are taking the full force of these price rises,” said the government spokesperson, Gabriel Attal. The announcement comes in the backdrop of impending presidential elections which is about to take place in six months. Experts argue that President Emmanuel Macron is seeking to limit damage to his economic record from spiralling energy prices. Also read | UK Fuel crisis, as people wait in queues, man rides horse into gas station, mocks those waiting to fill up on fuel The country’s prime minister, Jean Castex, said the one-off “inflation payout” would be given to all those earning less than €2,000 net a month, including private and public sector workers, the self-employed, job seekers and retired people. Distribution of the money would begin at the end of December. Also read | Macron targets radical Islam in France with 'massive and unprecedented' measures Castex said it would affect about 38 million people, and petrol prices would also be “frozen for the whole of 2022”. He added that the €2000 threshold would be calculated per person, not per household, and that the government would stick to its 2022 budget deficit target of 5 per cent of GDP by compensating the payout with new income and budget savings. As petrol prices steadily climbed in recent weeks, the government faced growing pressure to cut taxes paid at the pump, which can amount to up to 60 per cent of what drivers pay. Also read | From egg, and slap, to Macron to flying shoe at George W Bush — When world leaders were at the receiving end The payout comes just before the three-year anniversary of the anti-government gilets jaunes or yellow vests protests that began in autumn 2018 as a motorists’ revolt against fuel tax. Last weekend, small protests were held by gilets jaunes on roundabouts in some rural areas and small towns. The government is keen to stave off this escalating into fuel blockades or growing street marches. Finance minister Bruno Le Maire argued that step would be costly to public finances and would also amount to a subsidy for fossil fuels at a time when the government was trying to wean the economy off them. (With inputs from agencies)

France offers €100 'inflation bonus' to low-income people to offset discontent against rising fuel prices

The sudden increase in tea prices in Pakistan has ruined the taste of the impoverished people's lips.

A cup of tea costs Rs 40 at Rawalpindi, the Pakistan Army's headquarters.

On the other side, Prime Minister Imran Khan, who coined the phrase "Naya Pakistan," is attempting to deceive the public in the name of Islam and India.

Not just tea, but sugar, gas, and vegetables have all reached the seventh heaven in Pakistan.&nbsp;

Milk prices in Rawalpindi have risen from Rs 105 to Rs 120 per litre, according to tea merchants.

Simultaneously, the retail price of tea leaves has risen from Rs 800 to Rs 900.

The price of a gas cylinder has also risen from Rs 1500 to Rs 3,000.

Vendors said that the price increases on all of these goods had a negative impact on their profits.

They have no choice but to raise the price of tea in such a circumstance.&nbsp;

(With inputs from agencies)

The sudden increase in tea prices in Pakistan has ruined the taste of the impoverished people's lips. A cup of tea costs Rs 40 at Rawalpindi, the Pakistan Army's headquarters.

The sudden increase in tea prices in Pakistan has ruined the taste of the impoverished people's lips. A cup of tea costs Rs 40 at Rawalpindi, the Pakistan Army's headquarters. On the other side, Prime Minister Imran Khan, who coined the phrase "Naya Pakistan," is attempting to deceive the public in the name of Islam and India. Not just tea, but sugar, gas, and vegetables have all reached the seventh heaven in Pakistan. Milk prices in Rawalpindi have risen from Rs 105 to Rs 120 per litre, according to tea merchants. Simultaneously, the retail price of tea leaves has risen from Rs 800 to Rs 900. The price of a gas cylinder has also risen from Rs 1500 to Rs 3,000. Vendors said that the price increases on all of these goods had a negative impact on their profits. They have no choice but to raise the price of tea in such a circumstance. (With inputs from agencies)

In Pakistan, where inflation is at an all-time high, a cup of tea costs Rs 40 

Former President Trump relished in President Biden's troubles, asking voters whether congested supply lines, increasing gas costs, and a humiliating withdrawal from Afghanistan made them miss him.&nbsp; 
 
<a href="https://www.wionews.com/world/56-in-us-feel-cheating-affected-2020-presidential-election-outcome-says-poll-420060">Also read | 56% in US feel cheating affected 2020 presidential election outcome, says poll</a> 
 
"Covid is raging out of control, our supply chains are crashing with little product in our stores, we were humiliated in Afghanistan, our Border is a complete disaster, gas prices and inflation are zooming upward—how’s Biden doing? Do you miss me yet?" Trump said in a statement on Wednesday.

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“COVID is raging out of control, our supply chains are crashing with little product in our stores, we were humiliated in Afghanistan, our Border is a complete disaster, gas prices and inflation are zooming upward—how’s Biden doing? Do you miss me yet?” <a href="https://t.co/xpxErrtH4P">pic.twitter.com/xpxErrtH4P</a>
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It was posted on Twitter by his spokesperson, Liz Harrington.

A new survey shows that 70 percent of Republicans want him to run for president in 2024, and that he has a commanding lead over his major GOP opponents.

Meanwhile, the Biden administration is having a difficult time on several fronts.

His legislative agenda is delayed as party officials attempt to mend internal squabbles over expenditure plans.

Officials at the White House are rushing to avert supply chain issues that they fear could result in more empty shelves and interruptions to holiday shopping.

Though the tone of the remark was similar to his trademark tweets, Trump was banned from Twitter in January – while still the president – after Twitter claimed his statements might be construed as encouraging violence in the aftermath of the disturbance at the US Capitol.

In a series of remarks subsequently, he has chastised Biden, whom he refuses to recognise as the actual president.

In the United States, annual inflation has reached 5.4 percent, the highest level since the 2008 financial crisis.

(With inputs from agencies)

Former President Trump relished in President Biden's troubles, asking voters whether congested supply lines, increasing gas costs, and a humiliating withdrawal from Afghanistan made them miss him.

Former President Trump relished in President Biden's troubles, asking voters whether congested supply lines, increasing gas costs, and a humiliating withdrawal from Afghanistan made them miss him. Also read | 56% in US feel cheating affected 2020 presidential election outcome, says poll "Covid is raging out of control, our supply chains are crashing with little product in our stores, we were humiliated in Afghanistan, our Border is a complete disaster, gas prices and inflation are zooming upward—how’s Biden doing? Do you miss me yet?" Trump said in a statement on Wednesday. NEW! “COVID is raging out of control, our supply chains are crashing with little product in our stores, we were humiliated in Afghanistan, our Border is a complete disaster, gas prices and inflation are zooming upward—how’s Biden doing? Do you miss me yet?” pic.twitter.com/xpxErrtH4P — Liz Harrington (@realLizUSA) October 13, 2021 × It was posted on Twitter by his spokesperson, Liz Harrington. A new survey shows that 70 percent of Republicans want him to run for president in 2024, and that he has a commanding lead over his major GOP opponents. Meanwhile, the Biden administration is having a difficult time on several fronts. His legislative agenda is delayed as party officials attempt to mend internal squabbles over expenditure plans. Officials at the White House are rushing to avert supply chain issues that they fear could result in more empty shelves and interruptions to holiday shopping. Though the tone of the remark was similar to his trademark tweets, Trump was banned from Twitter in January – while still the president – after Twitter claimed his statements might be construed as encouraging violence in the aftermath of the disturbance at the US Capitol. In a series of remarks subsequently, he has chastised Biden, whom he refuses to recognise as the actual president. In the United States, annual inflation has reached 5.4 percent, the highest level since the 2008 financial crisis. (With inputs from agencies)

'How's Biden doing? 'Do you miss me yet?': Trump pokes fun at US President

"Anyone recognise him?" the police in Winter Haven, Florida, asked on Facebook last month.

Photos with the post showed a man walking out of a Walmart without paying for his items after several of his credit cards were declined, police said. Among the items in his cart were boxes of diapers.

"When your card is declined and you try another one with the same result, that is NOT licence to just walk out with the items anyway," read the Facebook post, which was later deleted.

The Winter Haven Police Department drew swift criticism for the post from people wondering why the department had gone after a man who had stolen basic necessities for his children, also pictured in the surveillance photos.

"That’s a good father in a hard spot," one Facebook user said in response to the department’s follow-up post. "Have some empathy."

After the incident, which was previously reported by WFTS-TV in Tampa, Florida, the store asked the police not to prosecute the man, according to a waiver of prosecution the Winter Haven Police Department provided to The New York Times. Walmart and the man did not respond to requests for comment.

It’s possible the man was among the 1 in 3 American families who struggle with diaper need, according to a February 2020 report by the National Diaper Bank Network, an organization that provides diapers to children. Joanne Samuel Goldblum, the network’s founder and CEO, said she suspects that figure probably rose during the coronavirus pandemic as diaper prices increased and supply plummeted.

"Diaper need is a topic that’s so swept under the rug," she said Friday. "COVID really laid it bare for us."

The pandemic has upended global supply chains and created a run on many products, including diapers. Kimberly-Clark and Procter &amp; Gamble, two of the country’s largest diaper manufacturers, increased the prices of baby products this year. A typical package of 100 diapers costs $30 to $50 from most online retailers.

Diaper banks across the country have reported recent surges in families who couldn’t afford diapers. WestSide Baby, which is based in Seattle, distributed 2.4 million diapers last year, up 60% from 1.5 million in 2019, according to Sarah Cody Roth, the organization’s executive director. WestSide Baby is on track this year to meet or exceed last year’s total, she said.

"Anyone recognise him?" the police in Winter Haven, Florida, asked on Facebook last month. Photos with the post showed a man walking out of a Walmart without paying for his items after several of his credit cards were declined, police said.

"Anyone recognise him?" the police in Winter Haven, Florida, asked on Facebook last month. Photos with the post showed a man walking out of a Walmart without paying for his items after several of his credit cards were declined, police said. Among the items in his cart were boxes of diapers. "When your card is declined and you try another one with the same result, that is NOT licence to just walk out with the items anyway," read the Facebook post, which was later deleted. The Winter Haven Police Department drew swift criticism for the post from people wondering why the department had gone after a man who had stolen basic necessities for his children, also pictured in the surveillance photos. "That’s a good father in a hard spot," one Facebook user said in response to the department’s follow-up post. "Have some empathy." After the incident, which was previously reported by WFTS-TV in Tampa, Florida, the store asked the police not to prosecute the man, according to a waiver of prosecution the Winter Haven Police Department provided to The New York Times. Walmart and the man did not respond to requests for comment. It’s possible the man was among the 1 in 3 American families who struggle with diaper need, according to a February 2020 report by the National Diaper Bank Network, an organization that provides diapers to children. Joanne Samuel Goldblum, the network’s founder and CEO, said she suspects that figure probably rose during the coronavirus pandemic as diaper prices increased and supply plummeted. "Diaper need is a topic that’s so swept under the rug," she said Friday. "COVID really laid it bare for us." The pandemic has upended global supply chains and created a run on many products, including diapers. Kimberly-Clark and Procter & Gamble, two of the country’s largest diaper manufacturers, increased the prices of baby products this year. A typical package of 100 diapers costs $30 to $50 from most online retailers. Diaper banks across the country have reported recent surges in families who couldn’t afford diapers. WestSide Baby, which is based in Seattle, distributed 2.4 million diapers last year, up 60% from 1.5 million in 2019, according to Sarah Cody Roth, the organization’s executive director. WestSide Baby is on track this year to meet or exceed last year’s total, she said.

Diapers are the latest pandemic shortage

Eurozone inflation accelerated to 3.4 per cent year-on-year in September, reaching a 13-year high, according to an estimate published by Eurostat, the statistical office of the European Union (EU).

Eurozone accelerated to 3.4 per cent, inflation hits 13-year high

The wholesale price-based inflation rose marginally to 11.39 per cent in August, mainly due to higher prices of manufactured goods, even as prices of food articles softened.

Snapping the two-month easing trend, WPI inflation rose in August and remained in double-digit for the fifth consecutive month. In July 2021, WPI inflation stood at 11.16 per cent. In August 2020, WPI inflation was at 0.41 per cent.

"The high rate of inflation in August 2021 is primarily due to rise in prices of non-food articles, mineral oils; crude petroleum and natural gas; manufactured products like basic metals; food products; textiles; chemicals and chemical products etc as compared the corresponding month of the previous year," the Commerce and Industry Ministry said in a statement.

Inflation in food articles eased for the fourth straight month, recording (-) 1.29 per cent in August, from zero per cent in July, even as onion and pulses prices spiked.&nbsp;

Inflation in onions was high at 62.78 per cent&nbsp;while that in pulses was 9.41 per cent. In vegetables, it was (-) 13.30 per cent in August.

Inflation in crude petroleum and natural gas was 40.03 per cent in August.

In manufactured products, inflation stood at 11.39 per cent in August&nbsp;against 11.20 per cent in July.

The RBI&nbsp;which mainly takes into account retail inflation&nbsp;in its monetary policy last month had kept interest rates unchanged at record lows. It projected CPI or retail inflation at 5.7 per cent during 2021-22, up from its earlier projection of 5.1 per cent.

Data released on Monday showed that retail inflation softened to a four-month low of 5.3 per cent in August&nbsp;from 5.59 per cent in the previous month&nbsp;led by subdued prices of food articles.

The wholesale price-based inflation rose marginally to 11.39 per cent in August, mainly due to higher prices of manufactured goods, even as prices of food articles softened.

The wholesale price-based inflation rose marginally to 11.39 per cent in August, mainly due to higher prices of manufactured goods, even as prices of food articles softened. Snapping the two-month easing trend, WPI inflation rose in August and remained in double-digit for the fifth consecutive month. In July 2021, WPI inflation stood at 11.16 per cent. In August 2020, WPI inflation was at 0.41 per cent. "The high rate of inflation in August 2021 is primarily due to rise in prices of non-food articles, mineral oils; crude petroleum and natural gas; manufactured products like basic metals; food products; textiles; chemicals and chemical products etc as compared the corresponding month of the previous year," the Commerce and Industry Ministry said in a statement. Inflation in food articles eased for the fourth straight month, recording (-) 1.29 per cent in August, from zero per cent in July, even as onion and pulses prices spiked. Inflation in onions was high at 62.78 per cent while that in pulses was 9.41 per cent. In vegetables, it was (-) 13.30 per cent in August. Inflation in crude petroleum and natural gas was 40.03 per cent in August. In manufactured products, inflation stood at 11.39 per cent in August against 11.20 per cent in July. The RBI which mainly takes into account retail inflation in its monetary policy last month had kept interest rates unchanged at record lows. It projected CPI or retail inflation at 5.7 per cent during 2021-22, up from its earlier projection of 5.1 per cent. Data released on Monday showed that retail inflation softened to a four-month low of 5.3 per cent in August from 5.59 per cent in the previous month led by subdued prices of food articles.

India's WPI inflation rose in August over costlier manufactured goods

Japan's wholesale inflation hovered near a 13-year high in August as raw material imports continued to rise on solid global demand, putting pressure on companies to pass on higher costs to households.

World Business Watch: Japan's wholesale inflation hovers near 13-year high as material costs rise

Economic crisis adds to the misery of Afghans. The prices of everyday items are rising. Billions of dollars of aids stalled, there are restrictions on cash withdrawal from banks and the Taliban are yet to form a new government. WION's Anas Mallick gets you a ground report.

WION Ground Report: While world fears Taliban, Afghans worry about inflation

Retail prices in Britain have shot up owing to a national shortage of lorry drivers and disruption to the global supply chain caused by the Covid pandemic, according to the latest data from the British Retail Consortium (BRC).

According to the Guardian, the costs of Brexit-induced red tape is also fuelling inflation as household budgets start to feel the sting.

The latest figures from the BRC reveal a 0.4 per cent month-on-month rise in August, driven by a 0.6 per cent rise in non-food prices, which includes a sharp spike in the cost of electrical goods caused by shortages of micro-chips and shipping problems.

“There are some modest indications that rising costs are starting to filter through into product prices,” Helen Dickinson, the chief executive of the BRC, which represents hundreds of retail businesses, told the Guardian.

“Food retailers are fighting to keep their prices down as far as possible. But mounting pressures – from rising commodity and shipping costs as well as Brexit-related red tape, mean this will not be sustainable for much longer, and food price rises are likely in the coming months,” he added.

Watch |<a href="https://www.wionews.com/videos/bid-to-fight-medical-staff-shortage-in-uk-404558">&nbsp;Bid to fight medical staff shortage in UK</a>

The BRC’s warning comes after the toy retailer The Entertainer said prices could rise by 10 per cent over 18 months because of supply chain disruption, labour shortages and higher transport costs.

The indications of rising prices surface&nbsp;in the UK as inflation across the eurozone surged to its highest level in a decade with mounting costs of energy, goods and services hitting household spending.

The statistics body Eurostat has estimated that euro area annual inflation is expected to be 3 per cent in August, up from 2.2 per cent in July.

(With inputs from agencies)

Retail prices in Britain have shot up owing to a national shortage of lorry drivers and disruption to the global supply chain caused by the Covid pandemic, according to the latest data from the British Retail Consortium (BRC).

Retail prices in Britain have shot up owing to a national shortage of lorry drivers and disruption to the global supply chain caused by the Covid pandemic, according to the latest data from the British Retail Consortium (BRC). According to the Guardian, the costs of Brexit-induced red tape is also fuelling inflation as household budgets start to feel the sting. The latest figures from the BRC reveal a 0.4 per cent month-on-month rise in August, driven by a 0.6 per cent rise in non-food prices, which includes a sharp spike in the cost of electrical goods caused by shortages of micro-chips and shipping problems. “There are some modest indications that rising costs are starting to filter through into product prices,” Helen Dickinson, the chief executive of the BRC, which represents hundreds of retail businesses, told the Guardian. “Food retailers are fighting to keep their prices down as far as possible. But mounting pressures – from rising commodity and shipping costs as well as Brexit-related red tape, mean this will not be sustainable for much longer, and food price rises are likely in the coming months,” he added. Watch | Bid to fight medical staff shortage in UK The BRC’s warning comes after the toy retailer The Entertainer said prices could rise by 10 per cent over 18 months because of supply chain disruption, labour shortages and higher transport costs. The indications of rising prices surface in the UK as inflation across the eurozone surged to its highest level in a decade with mounting costs of energy, goods and services hitting household spending. The statistics body Eurostat has estimated that euro area annual inflation is expected to be 3 per cent in August, up from 2.2 per cent in July. (With inputs from agencies)

Shortage of lorry drivers, Covid-induced supply disruptions driving inflation in UK

As hot weather conditions lifted prices of fresh food in South Korea consumer inflation accelerated. The consumer price index (CPI) last month rose 2.6% year-on-year, Statistics Korea data showed on Tuesday, accelerating from a 2.4% increase in June and beating a 2.4% increase tipped in a Reuters survey.

Hot weather conditions lift prices of fresh food in South Korea

As rising prices and the spread of new COVID-19&nbsp;variants&nbsp;increase risks to the US economy, Federal Reserve officials are expected to maintain their easy money policies intended to help American companies and workers survive the pandemic damage.

But as the policy-setting Federal Open Market Committee (FOMC) begins its two-day policy meeting Tuesday, markets and traders will be watching for hints of when it will begin tapering its massive monthly debt purchases.

The bond buying program aimed to ease lending conditions during the crisis, but has come under scrutiny recently as&nbsp;inflation&nbsp;has soared to record levels as businesses reopen and consumers spend the savings built up during the worst months of the pandemic.

And focus also will be on any sign the&nbsp;Fed&nbsp;is rethinking its pledge to keep the benchmark lending rate at zero until the economy achieves maximum employment.

Fed&nbsp;Chair Jerome Powell has repeatedly said the rise in&nbsp;inflation&nbsp;is a temporary effect of the economy getting back to normal, and that the&nbsp;Fed&nbsp;has tools to respond if the surge goes on too long.

But Sam Stovall, chief investment strategist at CFRA Research said the swiftness of the price spike likely has surprised the&nbsp;central bank.

<a href="https://www.wionews.com/world/us-sanctions-cuba-for-repressing-protests-399987">Also read |&nbsp;US sanctions Cuba for repressing protests</a>

"I think they're still saying it's transitory but they're squirming in their seats, feeling a bit anxious that the numbers have come in higher than expected," he said.

However, the&nbsp;Fed&nbsp;is not expected to alter its stimulative policies this week or at any point this year.

Powell has promised to communicate clearly in advance of any policy shift, and analysts believe he may wait to do that at the annual central banking conference in Jackson Hole, Wyoming scheduled for August.

Troubled&nbsp;recovery

Central bankers are convening during an uncertain moment for the world's largest economy.&nbsp;The fast-spreading Delta variant of COVID-19&nbsp;has prompted some parts of the United States to reimpose mask-wearing rules and sparked worries it could undermine the&nbsp;recovery.

At the same time data is showing prices surging across the economy, a consequence of supply chain snarls, shortages of components, unique dynamics like rental car companies moving to rebuild fleets and "base effects," or the comparison to the depressed prices of the year-ago period.

At the&nbsp;Fed's last meeting in June, signs of growing hawkishness appeared, with a majority of FOMC members predicting at least two rate hikes in 2023, and seven expecting one as soon as next year, according to quarterly economic projections. In March, a majority foresaw no rate hikes until after 2023.

Powell has downplayed those predictions, but Daniel Morris, chief market strategist at BNP Paribas, said analysts will be watching to see if the&nbsp;central bank&nbsp;chief's thinking has changed, particularly when he speaks to reporters after the meeting.

"I think there's still that kind of debate, are they more hawkish?" he said. "Any info we can get from Powell during the press conference to try to help settle that debate will be important and useful."

But Stovall said not to expect much in the way of details.

"On the one hand, they will try to assure people that the&nbsp;Fed&nbsp;is ever vigilant and does have the ability to make a difference. But on the other hand (they) will be pretty unspecific on what and when they plan to do things," he said.

A more-pressing decision for the&nbsp;Fed&nbsp;will be what to do about its monthly purchases of at least $80 billion &nbsp;in Treasury debt and at least $40 billion in agency mortgage-backed securities, which were part of the emergency measures taken as the economy collapsed last year.

Morris said the&nbsp;Fed&nbsp;must figure out when to scale them back, and how to do it without causing stock markets to gyrate.

"It's still tricky with them, and Powell is going to be very careful," he said.

As rising prices and the spread of new COVID-19 variants increase risks to the US economy, Federal Reserve officials are expected to maintain their easy money policies intended to help American companies and workers survive the pandemic damage.

As rising prices and the spread of new COVID-19 variants increase risks to the US economy, Federal Reserve officials are expected to maintain their easy money policies intended to help American companies and workers survive the pandemic damage. But as the policy-setting Federal Open Market Committee (FOMC) begins its two-day policy meeting Tuesday, markets and traders will be watching for hints of when it will begin tapering its massive monthly debt purchases. The bond buying program aimed to ease lending conditions during the crisis, but has come under scrutiny recently as inflation has soared to record levels as businesses reopen and consumers spend the savings built up during the worst months of the pandemic. And focus also will be on any sign the Fed is rethinking its pledge to keep the benchmark lending rate at zero until the economy achieves maximum employment. Fed Chair Jerome Powell has repeatedly said the rise in inflation is a temporary effect of the economy getting back to normal, and that the Fed has tools to respond if the surge goes on too long. But Sam Stovall, chief investment strategist at CFRA Research said the swiftness of the price spike likely has surprised the central bank. Also read | US sanctions Cuba for repressing protests "I think they're still saying it's transitory but they're squirming in their seats, feeling a bit anxious that the numbers have come in higher than expected," he said. However, the Fed is not expected to alter its stimulative policies this week or at any point this year. Powell has promised to communicate clearly in advance of any policy shift, and analysts believe he may wait to do that at the annual central banking conference in Jackson Hole, Wyoming scheduled for August. Troubled recovery Central bankers are convening during an uncertain moment for the world's largest economy. The fast-spreading Delta variant of COVID-19 has prompted some parts of the United States to reimpose mask-wearing rules and sparked worries it could undermine the recovery. At the same time data is showing prices surging across the economy, a consequence of supply chain snarls, shortages of components, unique dynamics like rental car companies moving to rebuild fleets and "base effects," or the comparison to the depressed prices of the year-ago period. At the Fed's last meeting in June, signs of growing hawkishness appeared, with a majority of FOMC members predicting at least two rate hikes in 2023, and seven expecting one as soon as next year, according to quarterly economic projections. In March, a majority foresaw no rate hikes until after 2023. Powell has downplayed those predictions, but Daniel Morris, chief market strategist at BNP Paribas, said analysts will be watching to see if the central bank chief's thinking has changed, particularly when he speaks to reporters after the meeting. "I think there's still that kind of debate, are they more hawkish?" he said. "Any info we can get from Powell during the press conference to try to help settle that debate will be important and useful." But Stovall said not to expect much in the way of details. "On the one hand, they will try to assure people that the Fed is ever vigilant and does have the ability to make a difference. But on the other hand (they) will be pretty unspecific on what and when they plan to do things," he said. A more-pressing decision for the Fed will be what to do about its monthly purchases of at least $80 billion in Treasury debt and at least $40 billion in agency mortgage-backed securities, which were part of the emergency measures taken as the economy collapsed last year. Morris said the Fed must figure out when to scale them back, and how to do it without causing stock markets to gyrate. "It's still tricky with them, and Powell is going to be very careful," he said.

Fed to meet as inflation, virus variants complicate US recovery

Japan's core consumer prices rose 0.2% in June from a year earlier to mark the fastest annual pace in over a year, in a sign that the impact of global commodity inflation was gradually broadening.

World Business Watch: Japan's core inflation hits 15-month high on energy costs

The US economy’s rebound from the pandemic is driving the biggest surge in inflation in nearly 13 years, with consumer prices rising in May by 5% from a year ago. The Labor Department said last month’s increase in the consumer-price index was the largest since August 2008, when the reading rose 5.4%.

World Business Watch: US inflation highest in 13 years as prices surge 5% in May

South Korea's consumer inflation has accelerated to a more than nine-year high in May, reinforcing calls for gradual monetary tightening, though the increase was mainly due to a low base effect and rises in oil and agricultural prices.

World Business Watch: South Korea’s inflation hits 9-year high as commodity prices jump

The wholesale price-based inflation shot up to over an eight-year high of 7.39 per cent in March on rising crude oil and metal prices.

Also, the low base of March last year, when the data was computed with a low response rate due to the nationwide lockdown, contributed to a spike in inflation in March 2021.

The WPI inflation was 4.17 per cent in February and 0.42 per cent in March 2020.

This is the third straight month of up-tick seen in the wholesale price index (WPI) based inflation.

"The annual rate of inflation stood at 7.39 per cent (provisional) for March 2021 over March 2020," the Commerce and Industry Ministry said.

Such a high level of WPI was last recorded in October 2012, when inflation was 7.4 per cent.

Inflation in food articles in March was 3.24 per cent as prices of pulses, fruits and paddy hardened.

In vegetables, the rate of price rise was (-) 5.19 per cent, compared to (-) 2.90 per cent in the previous month.

Inflation in pulses was 13.14 per cent in March, while in fruits it was 16.33 per cent.

Inflation in the fuel and power basket was 10.25 per cent in March, against 0.58 per cent in February, mainly on account of rising prices of petrol and diesel.

"The prices of crude oil, petroleum products and basic metal substantially increased in March 2021 as compared to the corresponding month of last year. Also, due to nationwide lockdown, the WPI index for March 2020 was computed with a relatively low response rate," the commerce ministry said while releasing the data.

Retail inflation, as per data released earlier this week, rose to a 4-month high of 5.52 per cent in March.

The RBI in its monetary policy earlier this month kept policy rates unchanged and said it will maintain an accommodative monetary policy stance to support growth and keep inflation at the targeted level.

It projected retail inflation at 5.2 per cent in the June quarter.

The wholesale price-based inflation shot up to over an eight-year high of 7.39 per cent in March on rising crude oil and metal prices. Also, the low base of March last year, when the data was computed with a low response rate due to the nationwide lockdown, contributed to a spike in inflation in March 2021.

The wholesale price-based inflation shot up to over an eight-year high of 7.39 per cent in March on rising crude oil and metal prices. Also, the low base of March last year, when the data was computed with a low response rate due to the nationwide lockdown, contributed to a spike in inflation in March 2021. The WPI inflation was 4.17 per cent in February and 0.42 per cent in March 2020. This is the third straight month of up-tick seen in the wholesale price index (WPI) based inflation. "The annual rate of inflation stood at 7.39 per cent (provisional) for March 2021 over March 2020," the Commerce and Industry Ministry said. Such a high level of WPI was last recorded in October 2012, when inflation was 7.4 per cent. Inflation in food articles in March was 3.24 per cent as prices of pulses, fruits and paddy hardened. In vegetables, the rate of price rise was (-) 5.19 per cent, compared to (-) 2.90 per cent in the previous month. Inflation in pulses was 13.14 per cent in March, while in fruits it was 16.33 per cent. Inflation in the fuel and power basket was 10.25 per cent in March, against 0.58 per cent in February, mainly on account of rising prices of petrol and diesel. "The prices of crude oil, petroleum products and basic metal substantially increased in March 2021 as compared to the corresponding month of last year. Also, due to nationwide lockdown, the WPI index for March 2020 was computed with a relatively low response rate," the commerce ministry said while releasing the data. Retail inflation, as per data released earlier this week, rose to a 4-month high of 5.52 per cent in March. The RBI in its monetary policy earlier this month kept policy rates unchanged and said it will maintain an accommodative monetary policy stance to support growth and keep inflation at the targeted level. It projected retail inflation at 5.2 per cent in the June quarter.

India wholesale price-based inflation spikes to over 8-year high of 7.39% in March

Even before President Joe Biden took office, some of his closest aides were focused on a question that risked derailing his economic agenda: Would his plans for a $1.9 trillion economic rescue package and additional government spending overheat the economy and fuel runaway inflation?

To find the answer, a close circle of advisers now working at the White House and the Treasury Department projected the behaviors of shoppers, employers, stock traders and others if Biden’s plans succeeded. Officials as senior as Janet Yellen, the Treasury secretary, pored over the analyses in video calls and in-person meetings, looking for any hint that Biden’s plans could generate sustained price increases that could hamstring family budgets. It never appeared.

Those efforts convinced Biden’s team that there is little risk of inflation spiraling out of the Federal Reserve’s control — an outcome that Wall Street analysts, a few prominent Republicans and even liberal economists like former Treasury Secretary Lawrence Summers have said could flow from the trillions being pumped into the economy.

Traditional readings of price increases are beginning to turn upward as the recovery accelerates. On Tuesday, the Consumer Price Index rose 0.6%, its fastest monthly increase in more than a decade, while a less volatile index excluding food and energy rose a more muted 0.3%.

But Biden’s advisers believe any price spike is likely to be temporary and not harmful, essentially a one-time event stemming from the unique nature of a pandemic recession that ruptured supply chains and continues to depress activity in key economic sectors like restaurant dining and tourism.

The administration’s view mirrors the posture of top officials at the Fed, including its chairman, Jerome Powell, whose mandate includes maintaining price stability in the economy. Powell has said that the Fed expects any short-term price pops to be temporary, not sustained, and not the type of uptick that would prompt the central bank to raise interest rates rapidly — or anytime soon.

“What we see is relatively modest increases in inflation,” Powell said in March. “But those are not permanent things.”

Armed with their internal data and conclusions, administration officials have begun to push back on warnings that a stimulus-fueled surge in consumer spending could revive a 1970s-style escalation in wages and prices that could cripple the economy in the years to come.

Yet they remain wary of the inflation threat and have devised the next wave of Biden’s spending plans, a $2.3 trillion infrastructure package, to dispense money gradually enough not to stoke further price increases right away. Administration officials also continue to check on real-time measures of prices across the economy, multiple times a day.

“We think the likeliest outlook over the next several months is for inflation to rise modestly,” two officials at Biden’s Council of Economic Advisers, Jared Bernstein and Ernie Tedeschi, wrote Monday in a blog post outlining some of the administration’s thinking. “We will, however, carefully monitor both actual price changes and inflation expectations for any signs of unexpected price pressures that might arise as America leaves the pandemic behind and enters the next economic expansion.”

Some Republicans call that posture dangerous. Sen. Rick Scott of Florida, chairman of his party’s campaign arm for the 2022 midterm elections, has called on Biden and Powell to present plans to fight inflation now.

“The president’s refusal to address this critical issue has a direct negative effect on Floridians and families across our nation, and hurts low- and fixed-income Americans the most,” Scott said in a news release last week. “It’s time for Biden to wake up from his liberal dream and realize that reckless spending has consequences, inflation is real and America’s debt crisis is growing. Inflation is rising and Americans deserve answers from Biden now.”

Economic teams in recent administrations spent little time worrying about inflation, because inflationary pressures have been tame for decades. It has fallen short of the Fed’s average target of 2% for 10 of the last 12 years, topping out at 2.5% in the midst of the longest economic expansion in history.

Shortly before the pandemic recession hit the United States in 2020, President Donald Trump’s economic team wrote that “price inflation remains low and stable” even with unemployment below 4%. As the economy struggled to climb out from the 2008 financial crisis under President Barack Obama, White House aides feared that prices might fall, instead of rise.

“Given the economic crisis, we worried about preventing deflation rather than inflation,” said Austan Goolsbee, a chairman of the Council of Economic Advisers during Obama’s first term.

The conversation has changed given the large amounts of money that the federal government is channeling into the economy, first under Trump and now under Biden. Since the pandemic took hold, Congress has approved more than $5 trillion in spending, including direct checks to individuals.

Biden’s aides are sufficiently worried about the risk of that spending fueling inflation that they shaped his infrastructure proposal, which has yet to be taken up by Congress, to funnel out $2.3 trillion over the course of eight years, which is slower than traditional stimulus.

Even before Summers and others raised economic concerns about Biden’s $1.9 trillion relief bill, officials were wrestling with their own worries about its inflation risks. They had internally concluded, with direction from Biden, that the biggest risk to the economy was going “too small” on the aid package — not spending enough to help vulnerable Americans survive continued stints of joblessness or lost income. But they wanted to know the risks of going “too big.”

They tested whether an uptick in inflation might cause people and financial markets to expect rapid price increases in the years to come, upending decades of what economists call “well-anchored” expectations for prices and potentially creating a situation where higher expectations led to higher inflation. They estimated the odds that the Fed would react to such moves by quickly and steeply raising interest rates, potentially slamming the brakes on growth and causing another recession.

The informal group that initially gathered to research those questions included Bernstein; David Kamin, a deputy director of the National Economic Council; Michael Pyle, Vice President Kamala Harris’ chief economic adviser; and two Treasury officials, Nellie Liang and Ben Harris. More members have joined over time, including Tedeschi.

The group reports regularly to Yellen and other senior officials including Brian Deese, who heads the National Economic Council, and Cecilia Rouse, who leads the Council of Economic Advisers. Its work has informed economic briefings of Biden and Harris.

“The president and the vice president, their job is to deliver good economic outcomes for the American people,” Pyle said in an interview. “Part of what delivering strong economic outcomes to the American people means is ensuring that their team is fully on top of both the tail winds to the U.S. economy but also the risks that are out there. And this is one of them.”

Pyle and his colleagues looked at financial market measures of inflation expectations, including one called the five-year, five-year forward, which currently shows investors expecting lower inflation levels over the next several years than they expected in 2018.

At the same time, officials at the Treasury’s Office of Economic Policy conducted a series of modeling exercises to “stress test” the virus relief package and how it might change those price and expectation measures if put in place. They considered scenarios in which consumers quickly spent their aid money, which included $1,400 checks, and scenarios in which they did not spend much of it at all right away. They talked with large banks about trends in customers’ cash balances and how quickly people were returning to the workforce. Yellen, a former Fed chair, helped adjust the models herself.

The exercises produced a wide range of possibilities for inflation. But they never suggested it would rise so rapidly that the Fed could not easily handle it by adjusting interest rates or other monetary policy tools. They saw no risk of a sharp return to recession — and no reason to pull back from spending proposals that administration officials believe will help the economy heal faster and help historically disadvantaged groups, like Black and Hispanic workers, regain jobs and income.

“We’re going to see some heat in this economy,” Pyle said. “That heat is going to be good and redound to the benefit of wages and labor market conditions overall and particularly for a number of communities that have been at the margins of the labor market for too long.”

If the data proves that forecast wrong, officials say privately, they will be quick to adapt. But they will not say how. If inflation were to accelerate in a sustained and surprising way, some officials suggest, the administration would trust the Fed to step in to contain it.

There is no plan, as of yet, for Biden to consider inflation-fighting actions of his own.

Even before President Joe Biden took office, some of his closest aides were focused on a question that risked derailing his economic agenda: Would his plans for a $1.

Even before President Joe Biden took office, some of his closest aides were focused on a question that risked derailing his economic agenda: Would his plans for a $1.9 trillion economic rescue package and additional government spending overheat the economy and fuel runaway inflation? To find the answer, a close circle of advisers now working at the White House and the Treasury Department projected the behaviors of shoppers, employers, stock traders and others if Biden’s plans succeeded. Officials as senior as Janet Yellen, the Treasury secretary, pored over the analyses in video calls and in-person meetings, looking for any hint that Biden’s plans could generate sustained price increases that could hamstring family budgets. It never appeared. Those efforts convinced Biden’s team that there is little risk of inflation spiraling out of the Federal Reserve’s control — an outcome that Wall Street analysts, a few prominent Republicans and even liberal economists like former Treasury Secretary Lawrence Summers have said could flow from the trillions being pumped into the economy. Traditional readings of price increases are beginning to turn upward as the recovery accelerates. On Tuesday, the Consumer Price Index rose 0.6%, its fastest monthly increase in more than a decade, while a less volatile index excluding food and energy rose a more muted 0.3%. But Biden’s advisers believe any price spike is likely to be temporary and not harmful, essentially a one-time event stemming from the unique nature of a pandemic recession that ruptured supply chains and continues to depress activity in key economic sectors like restaurant dining and tourism. The administration’s view mirrors the posture of top officials at the Fed, including its chairman, Jerome Powell, whose mandate includes maintaining price stability in the economy. Powell has said that the Fed expects any short-term price pops to be temporary, not sustained, and not the type of uptick that would prompt the central bank to raise interest rates rapidly — or anytime soon. “What we see is relatively modest increases in inflation,” Powell said in March. “But those are not permanent things.” Armed with their internal data and conclusions, administration officials have begun to push back on warnings that a stimulus-fueled surge in consumer spending could revive a 1970s-style escalation in wages and prices that could cripple the economy in the years to come. Yet they remain wary of the inflation threat and have devised the next wave of Biden’s spending plans, a $2.3 trillion infrastructure package, to dispense money gradually enough not to stoke further price increases right away. Administration officials also continue to check on real-time measures of prices across the economy, multiple times a day. “We think the likeliest outlook over the next several months is for inflation to rise modestly,” two officials at Biden’s Council of Economic Advisers, Jared Bernstein and Ernie Tedeschi, wrote Monday in a blog post outlining some of the administration’s thinking. “We will, however, carefully monitor both actual price changes and inflation expectations for any signs of unexpected price pressures that might arise as America leaves the pandemic behind and enters the next economic expansion.” Some Republicans call that posture dangerous. Sen. Rick Scott of Florida, chairman of his party’s campaign arm for the 2022 midterm elections, has called on Biden and Powell to present plans to fight inflation now. “The president’s refusal to address this critical issue has a direct negative effect on Floridians and families across our nation, and hurts low- and fixed-income Americans the most,” Scott said in a news release last week. “It’s time for Biden to wake up from his liberal dream and realize that reckless spending has consequences, inflation is real and America’s debt crisis is growing. Inflation is rising and Americans deserve answers from Biden now.” Economic teams in recent administrations spent little time worrying about inflation, because inflationary pressures have been tame for decades. It has fallen short of the Fed’s average target of 2% for 10 of the last 12 years, topping out at 2.5% in the midst of the longest economic expansion in history. Shortly before the pandemic recession hit the United States in 2020, President Donald Trump’s economic team wrote that “price inflation remains low and stable” even with unemployment below 4%. As the economy struggled to climb out from the 2008 financial crisis under President Barack Obama, White House aides feared that prices might fall, instead of rise. “Given the economic crisis, we worried about preventing deflation rather than inflation,” said Austan Goolsbee, a chairman of the Council of Economic Advisers during Obama’s first term. The conversation has changed given the large amounts of money that the federal government is channeling into the economy, first under Trump and now under Biden. Since the pandemic took hold, Congress has approved more than $5 trillion in spending, including direct checks to individuals. Biden’s aides are sufficiently worried about the risk of that spending fueling inflation that they shaped his infrastructure proposal, which has yet to be taken up by Congress, to funnel out $2.3 trillion over the course of eight years, which is slower than traditional stimulus. Even before Summers and others raised economic concerns about Biden’s $1.9 trillion relief bill, officials were wrestling with their own worries about its inflation risks. They had internally concluded, with direction from Biden, that the biggest risk to the economy was going “too small” on the aid package — not spending enough to help vulnerable Americans survive continued stints of joblessness or lost income. But they wanted to know the risks of going “too big.” They tested whether an uptick in inflation might cause people and financial markets to expect rapid price increases in the years to come, upending decades of what economists call “well-anchored” expectations for prices and potentially creating a situation where higher expectations led to higher inflation. They estimated the odds that the Fed would react to such moves by quickly and steeply raising interest rates, potentially slamming the brakes on growth and causing another recession. The informal group that initially gathered to research those questions included Bernstein; David Kamin, a deputy director of the National Economic Council; Michael Pyle, Vice President Kamala Harris’ chief economic adviser; and two Treasury officials, Nellie Liang and Ben Harris. More members have joined over time, including Tedeschi. The group reports regularly to Yellen and other senior officials including Brian Deese, who heads the National Economic Council, and Cecilia Rouse, who leads the Council of Economic Advisers. Its work has informed economic briefings of Biden and Harris. “The president and the vice president, their job is to deliver good economic outcomes for the American people,” Pyle said in an interview. “Part of what delivering strong economic outcomes to the American people means is ensuring that their team is fully on top of both the tail winds to the U.S. economy but also the risks that are out there. And this is one of them.” Pyle and his colleagues looked at financial market measures of inflation expectations, including one called the five-year, five-year forward, which currently shows investors expecting lower inflation levels over the next several years than they expected in 2018. At the same time, officials at the Treasury’s Office of Economic Policy conducted a series of modeling exercises to “stress test” the virus relief package and how it might change those price and expectation measures if put in place. They considered scenarios in which consumers quickly spent their aid money, which included $1,400 checks, and scenarios in which they did not spend much of it at all right away. They talked with large banks about trends in customers’ cash balances and how quickly people were returning to the workforce. Yellen, a former Fed chair, helped adjust the models herself. The exercises produced a wide range of possibilities for inflation. But they never suggested it would rise so rapidly that the Fed could not easily handle it by adjusting interest rates or other monetary policy tools. They saw no risk of a sharp return to recession — and no reason to pull back from spending proposals that administration officials believe will help the economy heal faster and help historically disadvantaged groups, like Black and Hispanic workers, regain jobs and income. “We’re going to see some heat in this economy,” Pyle said. “That heat is going to be good and redound to the benefit of wages and labor market conditions overall and particularly for a number of communities that have been at the margins of the labor market for too long.” If the data proves that forecast wrong, officials say privately, they will be quick to adapt. But they will not say how. If inflation were to accelerate in a sustained and surprising way, some officials suggest, the administration would trust the Fed to step in to contain it. There is no plan, as of yet, for Biden to consider inflation-fighting actions of his own.

The Biden administration is quietly keeping tabs on inflation

The wholesale price-based inflation rose for the second consecutive month in February to 4.17 per cent&nbsp;as food, fuel and power prices spiked.

The WPI inflation was 2.03 per cent in January and 2.26 per cent in February last year.

After witnessing months of softening of prices, the food articles in February saw 1.36 per cent inflation. In January it was (-) 2.80 per cent.

The vegetable price&nbsp;rise was (-) 2.90 per cent in February, against (-) 20.82 per cent in January.

Inflation in pulses was 10.25 per cent in February, while it fruits it was 9.48 per cent, and in fuel and power basket it was 0.58 per cent.

The RBI in its monetary policy last month kept interest rates unchanged for the fourth consecutive meeting and said that the near-term inflation outlook has turned favourable.

Retail inflation, based on the consumer price index, was at 5.03 per cent in February, data released last week showed.

Industrial&nbsp;growth re-entered the negative territory by contracting by 1.6 per cent in January, while retail inflation soared to a three-month high of 5.03 per cent in February on costlier food items.

The National Statistical Office (NSO) in the Ministry of Statistics and Programme Implementation (MoSPI) had earlier released the Quick Estimates of Index of Industrial Production (IIP) for January 2021 and Consumer Price Index (CPI) numbers for February 2021.

As per the data, the contraction in the IIP in January was mainly on account of a decline in output of capital goods, manufacturing and mining sectors.

The output of the manufacturing sector, which accounts for 77.6 per cent of the IIP, contracted by 2 per cent during the month under review, as against a growth of 1.8 per cent during the corresponding month last fiscal.

The worst performance was witnessed in the capital goods sector which showed a contraction of 9.6 per cent during January over a decline of 4.4 per cent during the same month in the previous fiscal.

NSO also revised upwardly the IIP number for December 2020 to 1.56 per cent from the earlier estimate of 1 per cent.

The factory output growth was in the negative territory in November 2020. It had posted an increase during September and October 2020.

The wholesale price-based inflation rose for the second consecutive month in February to 4.17 per cent as food, fuel and power prices spiked. The WPI inflation was 2.

The wholesale price-based inflation rose for the second consecutive month in February to 4.17 per cent as food, fuel and power prices spiked. The WPI inflation was 2.03 per cent in January and 2.26 per cent in February last year. After witnessing months of softening of prices, the food articles in February saw 1.36 per cent inflation. In January it was (-) 2.80 per cent. The vegetable price rise was (-) 2.90 per cent in February, against (-) 20.82 per cent in January. Inflation in pulses was 10.25 per cent in February, while it fruits it was 9.48 per cent, and in fuel and power basket it was 0.58 per cent. The RBI in its monetary policy last month kept interest rates unchanged for the fourth consecutive meeting and said that the near-term inflation outlook has turned favourable. Retail inflation, based on the consumer price index, was at 5.03 per cent in February, data released last week showed. Industrial growth re-entered the negative territory by contracting by 1.6 per cent in January, while retail inflation soared to a three-month high of 5.03 per cent in February on costlier food items. The National Statistical Office (NSO) in the Ministry of Statistics and Programme Implementation (MoSPI) had earlier released the Quick Estimates of Index of Industrial Production (IIP) for January 2021 and Consumer Price Index (CPI) numbers for February 2021. As per the data, the contraction in the IIP in January was mainly on account of a decline in output of capital goods, manufacturing and mining sectors. The output of the manufacturing sector, which accounts for 77.6 per cent of the IIP, contracted by 2 per cent during the month under review, as against a growth of 1.8 per cent during the corresponding month last fiscal. The worst performance was witnessed in the capital goods sector which showed a contraction of 9.6 per cent during January over a decline of 4.4 per cent during the same month in the previous fiscal. NSO also revised upwardly the IIP number for December 2020 to 1.56 per cent from the earlier estimate of 1 per cent. The factory output growth was in the negative territory in November 2020. It had posted an increase during September and October 2020.

Inflation rises over 4% over costlier food, fuel prices

Inflation in Sudan has risen to one of the highest levels in the world, and the country risks slipping into hyperinflation unless it gets its budget deficit and money supply under control, economists say.

The runaway prices have worsened an economic crisis for millions of ordinary Sudanese and imperilled a political transition under a military-civilian power sharing deal.

The government has run up enormous budget deficits by subsidising the cost of fuel, then financed the deficits by printing money.

This has debased the currency, weakening it against other currencies and driving inflation up to annual 230% in October, according to the state statistics bureau.

The skyrocketing prices have led many consumers to spend their salaries quickly, particularly on durable items that hold their value.

Idrees Abdelmoniem, who works in marketing at an engineering company in Khartoum, said he had snapped up car spare parts and furniture, but was not as quick with food and drink, whose prices were not increasing as fast.

“If I have something I want to buy outside of the monthly house supplies, I buy it as soon as I get money, and I won’t even try to haggle because tomorrow it could be double the price,” he said.

Central bank figures show the scale of money printing by the authorities with the M2 money supply measure increasing by over 50% in the year to end-September. In September alone M2 rose by 7.13%.

Steve Hanke, a hyperinflation specialist at Johns Hopkins University, calculated that on a monthly basis, the inflation rate has accelerated to about 24% a month, dangerously high, but still below hyperinflation, generally defined as 50% a month.

He placed Sudan among the five countries with the highest inflation.

“It’s pretty scary,” he said, adding that it was hard to predict what direction inflation would go from here.

SUBSIDIES

A US decision to remove Sudan from its list of state sponsors of terrorism has provided little immediate relief from the economic crisis and the country has turned to the International Monetary Fund for help.

Sudan is counting on a reform programme drawn up with the lender to help get control of the deficit, exacerbated by decades of U.S. economic sanctions and by economic mismanagement under President Omar al-Bashir, who was ousted in a popular uprising in April of last year.

Gross domestic product (GDP) contracted by more than 2% in both 2018 and 2019 and is expected to shrink another 8.5% in 2020 after being walloped by the coronavirus pandemic, Sudan told the IMF in September.

The one-year staff-monitored programme signed with the IMF commits the transitional government to reforming energy subsidies and reducing government borrowing from the central bank, among other reforms.

The programme is designed to provide a track record that would qualify Sudan for debt relief from its official creditors.

“The issue of hyperinflation is real, and it requires serious attention,” said Ibrahim Elbadawi, who stepped down as Sudan’s finance minister in July.

“The starting point should be the subsidies, because that will have unquestionable implications for the finances of the government.”

Fuel subsidies, which account for 71% of all subsidies, were equivalent to 10.6% of GDP in 2019, according to the IMF.

The government this year began allowing private companies to import petrol and diesel at near market prices and has gradually reduced the number of stations where subsidised fuel is sold.

Last month it doubled the price of locally produced petrol to 56 Sudanese pounds a litre, still among the lowest levels in the world. It says it stopped subsidising petrol and diesel altogether as of September.

The reforms should reduce fuel subsidies to 2.2% this year, the IMF said, but imported fuel will further stretch people’s resources as a collapsing currency pushes up its local price.

This week one U.S. dollar bought 255 Sudanese pounds on the black market, up from about 85 pounds a year ago. At the official rate a dollar fetches 55 pounds.

“Because of the gas situation, I’ve literally stopped going further than a 9 kilometre radius,” said Huda Khalid, who considers herself relatively well paid as a primary school teaching assistant at a private school. A 50% salary raise has done little to help.

“Electricity, gas money, internet, and groceries for a week and my salary is basically gone. For the rest, my dad sends money from Oman.”

Inflation in Sudan has risen to one of the highest levels in the world, and the country risks slipping into hyperinflation unless it gets its budget deficit and money supply under control, economists say.

Inflation in Sudan has risen to one of the highest levels in the world, and the country risks slipping into hyperinflation unless it gets its budget deficit and money supply under control, economists say. The runaway prices have worsened an economic crisis for millions of ordinary Sudanese and imperilled a political transition under a military-civilian power sharing deal. The government has run up enormous budget deficits by subsidising the cost of fuel, then financed the deficits by printing money. This has debased the currency, weakening it against other currencies and driving inflation up to annual 230% in October, according to the state statistics bureau. The skyrocketing prices have led many consumers to spend their salaries quickly, particularly on durable items that hold their value. Idrees Abdelmoniem, who works in marketing at an engineering company in Khartoum, said he had snapped up car spare parts and furniture, but was not as quick with food and drink, whose prices were not increasing as fast. “If I have something I want to buy outside of the monthly house supplies, I buy it as soon as I get money, and I won’t even try to haggle because tomorrow it could be double the price,” he said. Central bank figures show the scale of money printing by the authorities with the M2 money supply measure increasing by over 50% in the year to end-September. In September alone M2 rose by 7.13%. Steve Hanke, a hyperinflation specialist at Johns Hopkins University, calculated that on a monthly basis, the inflation rate has accelerated to about 24% a month, dangerously high, but still below hyperinflation, generally defined as 50% a month. He placed Sudan among the five countries with the highest inflation. “It’s pretty scary,” he said, adding that it was hard to predict what direction inflation would go from here. SUBSIDIES A US decision to remove Sudan from its list of state sponsors of terrorism has provided little immediate relief from the economic crisis and the country has turned to the International Monetary Fund for help. Sudan is counting on a reform programme drawn up with the lender to help get control of the deficit, exacerbated by decades of U.S. economic sanctions and by economic mismanagement under President Omar al-Bashir, who was ousted in a popular uprising in April of last year. Gross domestic product (GDP) contracted by more than 2% in both 2018 and 2019 and is expected to shrink another 8.5% in 2020 after being walloped by the coronavirus pandemic, Sudan told the IMF in September. The one-year staff-monitored programme signed with the IMF commits the transitional government to reforming energy subsidies and reducing government borrowing from the central bank, among other reforms. The programme is designed to provide a track record that would qualify Sudan for debt relief from its official creditors. “The issue of hyperinflation is real, and it requires serious attention,” said Ibrahim Elbadawi, who stepped down as Sudan’s finance minister in July. “The starting point should be the subsidies, because that will have unquestionable implications for the finances of the government.” Fuel subsidies, which account for 71% of all subsidies, were equivalent to 10.6% of GDP in 2019, according to the IMF. The government this year began allowing private companies to import petrol and diesel at near market prices and has gradually reduced the number of stations where subsidised fuel is sold. Last month it doubled the price of locally produced petrol to 56 Sudanese pounds a litre, still among the lowest levels in the world. It says it stopped subsidising petrol and diesel altogether as of September. The reforms should reduce fuel subsidies to 2.2% this year, the IMF said, but imported fuel will further stretch people’s resources as a collapsing currency pushes up its local price. This week one U.S. dollar bought 255 Sudanese pounds on the black market, up from about 85 pounds a year ago. At the official rate a dollar fetches 55 pounds. “Because of the gas situation, I’ve literally stopped going further than a 9 kilometre radius,” said Huda Khalid, who considers herself relatively well paid as a primary school teaching assistant at a private school. A 50% salary raise has done little to help. “Electricity, gas money, internet, and groceries for a week and my salary is basically gone. For the rest, my dad sends money from Oman.”

Sudan inflation soars, raising spectre of hyperinflation

India's annual retail inflation picked up in September to 7.34% from a year ago as food prices surged ahead of the festival season, government data showed on Monday.

Analysts in a Reuters poll had forecast that retail inflation would rise to 6.88% in September, compared to 6.69% in the previous month.

(More details awaited)

India's annual retail inflation picked up in September to 7.34% from a year ago as food prices surged ahead of the festival season, government data showed on Monday.

India's annual retail inflation picked up in September to 7.34% from a year ago as food prices surged ahead of the festival season, government data showed on Monday. Analysts in a Reuters poll had forecast that retail inflation would rise to 6.88% in September, compared to 6.69% in the previous month. (More details awaited)

India's September inflation picks up to 7.34%

The central bank will tolerate an inflation rate that exceeds its 2% target for an extended period before raising interest rates.

Federal reserve is taking a new approach to inflation

US consumer prices fell for a third straight month in May and underlying inflation was weak as demand for goods and services remained subdued amid a recession caused by the COVID-19 pandemic.

But with nonessential businesses reopening after shuttering in mid-March to slow the spread of COVID-19, deflation, a decline in the general price level, is unlikely. Still, the report from the Labor Department on Wednesday suggested the disinflationary trend could persist for a while.

That together with a struggling labor market supports the Federal Reserve`s commitment to maintain its very accommodative monetary policy stance for some time while nursing the economy back to health. The US central bank said on Wednesday COVID-19 "will weigh heavily on economic activity, employment, and inflation in the near term."

<a href="https://www.wionews.com/business-economy/indias-economy-to-contract-by-32-in-2020-21-world-bank-304352">Also read:&nbsp;India's economy to contract by 3.2% in 2020-21: World Bank</a>

"We expect the crisis to result in a sustained slowing in inflation due to a net increase in slack," said Jim O`Sullivan, chief US macro strategist at TD Securities in New York.

The Labor Department said its consumer price index dipped 0.1% last month after plunging 0.8% in April, which was the largest decline since December 2008. Prices were held down by a 3.5% drop in the cost of gasoline, which followed a 20.6% plunge in April. That offset a 0.7% increase in the cost of food last month. Food prices jumped 1.5% in April.

Prices for food consumed at home rose 1.0% after surging 2.6% in April. The cost of beef shot up a record 10.8% in May, reflecting shortages as a result of COVID-19 infections at meat processing plants. Expensive food has led consumers to anticipate higher inflation this year.

<a href="https://www.wionews.com/world/japans-economy-minister-warns-against-deepening-negative-rates-304121">Also read:&nbsp;Japan's economy minister warns against deepening negative rates</a>

Consumers also paid more for dairy products, fruits and vegetables. But cereals and bakery products were cheaper last month. In the 12 months through May, the CPI edged up 0.1%. That was the smallest year-on-year rise since September 2015 and followed a 0.3% increase in April.

Economists polled by Reuters had forecast the CPI would be unchanged in May and gain 0.2% year-on-year. 
The National Bureau of Economic Research, the arbiter of US recessions, declared on Monday that the economy slipped into recession in February.

The Labor Department said in-store data collection had remained suspended since March 16 because of risks of exposure to COVID-19. The department added that data collection last month was also impacted "by the temporary closing or limited operations of certain types of establishments," leading to "an increase in the number of prices being considered temporarily unavailable and imputed."

Stocks on Wall Street were mixed in choppy trading. The dollar fell against a basket of currencies. US Treasury prices rose.

Rents increase

Excluding the volatile food and energy components, the CPI slipped 0.1% in May after decreasing 0.4% in April, the largest drop since the series started in 1957. The so-called core CPI fell in March for the first time since January 2010.

May marked the first time that the core CPI has dropped for three consecutive months. Underlying inflation was depressed by continued decreases in the costs of motor vehicle insurance and apparel. Airline fares fell 4.9% and used cars and trucks prices dropped 0.4%.

The cost of hotel and motel accommodation dropped 1.8% last month after record 8.1% plunge in April.

Those price declines offset a 0.3% increase in owners` equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home. This rent measure gained 0.2% in April, likely reflecting forbearance agreements between landlords and tenants who have lost their jobs or have had their hours cut because of the global pandemic.

The economy has shed nearly 20 million jobs since March.

Healthcare costs increased 0.5% in May after a solid 0.4% rise in April. Consumers paid more for household furnishings, new vehicles, alcoholic beverages and education.

In the 12 months through May, the core CPI rose 1.2%, the smallest gain since March 2011. The core CPI increased 1.4% year-on-year in April.

The Fed tracks the core personal consumption expenditures (PCE) price index for its 2% inflation target. The core PCE price index increased 1.0% on a year-on-year basis in April, the smallest advance since December 2010. May`s core PCE price index data will be released at the end of the month.

The Fed projected core inflation rising 1.0% this year and picking up to 1.5% in 2021. Back in December, it forecast inflation at 1.9% this year and 2% in 2021.

"The weakness in the economy should keep downward pressure on inflation over time and we expect softness in the core measures to be reported for upcoming months," said Daniel Silver, an economist at JPMorgan in New York.

"But we think that we probably have moved past the largest sequential monthly declines in inflation that came shortly after the virus spread."

US consumer prices fell for a third straight month in May and underlying inflation was weak as demand for goods and services remained subdued amid a recession caused by the COVID-19 pandemic.

US consumer prices fell for a third straight month in May and underlying inflation was weak as demand for goods and services remained subdued amid a recession caused by the COVID-19 pandemic. But with nonessential businesses reopening after shuttering in mid-March to slow the spread of COVID-19, deflation, a decline in the general price level, is unlikely. Still, the report from the Labor Department on Wednesday suggested the disinflationary trend could persist for a while. That together with a struggling labor market supports the Federal Reserve`s commitment to maintain its very accommodative monetary policy stance for some time while nursing the economy back to health. The US central bank said on Wednesday COVID-19 "will weigh heavily on economic activity, employment, and inflation in the near term." Also read: India's economy to contract by 3.2% in 2020-21: World Bank "We expect the crisis to result in a sustained slowing in inflation due to a net increase in slack," said Jim O`Sullivan, chief US macro strategist at TD Securities in New York. The Labor Department said its consumer price index dipped 0.1% last month after plunging 0.8% in April, which was the largest decline since December 2008. Prices were held down by a 3.5% drop in the cost of gasoline, which followed a 20.6% plunge in April. That offset a 0.7% increase in the cost of food last month. Food prices jumped 1.5% in April. Prices for food consumed at home rose 1.0% after surging 2.6% in April. The cost of beef shot up a record 10.8% in May, reflecting shortages as a result of COVID-19 infections at meat processing plants. Expensive food has led consumers to anticipate higher inflation this year. Also read: Japan's economy minister warns against deepening negative rates Consumers also paid more for dairy products, fruits and vegetables. But cereals and bakery products were cheaper last month. In the 12 months through May, the CPI edged up 0.1%. That was the smallest year-on-year rise since September 2015 and followed a 0.3% increase in April. Economists polled by Reuters had forecast the CPI would be unchanged in May and gain 0.2% year-on-year. The National Bureau of Economic Research, the arbiter of US recessions, declared on Monday that the economy slipped into recession in February. The Labor Department said in-store data collection had remained suspended since March 16 because of risks of exposure to COVID-19. The department added that data collection last month was also impacted "by the temporary closing or limited operations of certain types of establishments," leading to "an increase in the number of prices being considered temporarily unavailable and imputed." Stocks on Wall Street were mixed in choppy trading. The dollar fell against a basket of currencies. US Treasury prices rose. Rents increase Excluding the volatile food and energy components, the CPI slipped 0.1% in May after decreasing 0.4% in April, the largest drop since the series started in 1957. The so-called core CPI fell in March for the first time since January 2010. May marked the first time that the core CPI has dropped for three consecutive months. Underlying inflation was depressed by continued decreases in the costs of motor vehicle insurance and apparel. Airline fares fell 4.9% and used cars and trucks prices dropped 0.4%. The cost of hotel and motel accommodation dropped 1.8% last month after record 8.1% plunge in April. Those price declines offset a 0.3% increase in owners` equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home. This rent measure gained 0.2% in April, likely reflecting forbearance agreements between landlords and tenants who have lost their jobs or have had their hours cut because of the global pandemic. The economy has shed nearly 20 million jobs since March. Healthcare costs increased 0.5% in May after a solid 0.4% rise in April. Consumers paid more for household furnishings, new vehicles, alcoholic beverages and education. In the 12 months through May, the core CPI rose 1.2%, the smallest gain since March 2011. The core CPI increased 1.4% year-on-year in April. The Fed tracks the core personal consumption expenditures (PCE) price index for its 2% inflation target. The core PCE price index increased 1.0% on a year-on-year basis in April, the smallest advance since December 2010. May`s core PCE price index data will be released at the end of the month. The Fed projected core inflation rising 1.0% this year and picking up to 1.5% in 2021. Back in December, it forecast inflation at 1.9% this year and 2% in 2021. "The weakness in the economy should keep downward pressure on inflation over time and we expect softness in the core measures to be reported for upcoming months," said Daniel Silver, an economist at JPMorgan in New York. "But we think that we probably have moved past the largest sequential monthly declines in inflation that came shortly after the virus spread."

US inflation subdued with economy in recession

Pakistan's consumer price inflation eased to 9.5% in April, its statistics office said on Friday, extending a months-long decline as the economy tanks due to the coronavirus crisis despite three interest rate cuts.

The South Asian nation is struggling to keep its economy afloat as the reported number of infections from COVID-19, the highly contagious respiratory disease caused by the novel coronavirus has risen to 16,817, with 385 deaths.

Consumer price inflation was 10.24% in March after having risen in January to 14.56%, its highest in over a decade, severely squeezing household budgets.

The central bank kept interest rates unchanged at 13.25% in January but, once the coronavirus began battering business and household finances, it slashed rates three times in recent weeks to 9% to help cushion the blow.

Pakistan now faces a balance of payment crisis as the economy heads towards a major recession with a 1.5 per cent contraction forecast in the current financial year ending in June, compared with a pre-COVID-19 forecast of nearly 3% growth, according to the finance ministry and central bank.

Growth is projected to recover to about 2% in the 2021/22 fiscal year.

A steep drop in oil prices, which comprise most of Pakistan's import bill, has been welcome, allowing pump prices for petrol and diesel to be cut by 27% and 35% respectively since February, with the biggest cut coming on Thursday.

But critics say the government has not passed on the full advantage of the oil price fall to the public, instead raising taxes on petrol and diesel by up to 300%.

With the current account deficit mounting and foreign reserves shrivelling, businesses and industries that were shut to contain the spread of the coronavirus have been allowed to start reopening.

Pakistan agreed a $6 billion bailout from the International Monetary Fund last year and secured another $1.386 billion in rapid financing from the IMF at zero interest last month.

Islamabad is hoping for more bailout packages from the World Bank and other development partners as it plans to file for debt relief from G20 countries and bilateral partners, mainly longtime ally China.

Pakistan's consumer price inflation eased to 9.5% in April, its statistics office said on Friday, extending a months-long decline as the economy tanks due to the coronavirus crisis despite three interest rate cuts.

Pakistan's consumer price inflation eased to 9.5% in April, its statistics office said on Friday, extending a months-long decline as the economy tanks due to the coronavirus crisis despite three interest rate cuts. The South Asian nation is struggling to keep its economy afloat as the reported number of infections from COVID-19, the highly contagious respiratory disease caused by the novel coronavirus has risen to 16,817, with 385 deaths. Consumer price inflation was 10.24% in March after having risen in January to 14.56%, its highest in over a decade, severely squeezing household budgets. The central bank kept interest rates unchanged at 13.25% in January but, once the coronavirus began battering business and household finances, it slashed rates three times in recent weeks to 9% to help cushion the blow. Pakistan now faces a balance of payment crisis as the economy heads towards a major recession with a 1.5 per cent contraction forecast in the current financial year ending in June, compared with a pre-COVID-19 forecast of nearly 3% growth, according to the finance ministry and central bank. Growth is projected to recover to about 2% in the 2021/22 fiscal year. A steep drop in oil prices, which comprise most of Pakistan's import bill, has been welcome, allowing pump prices for petrol and diesel to be cut by 27% and 35% respectively since February, with the biggest cut coming on Thursday. But critics say the government has not passed on the full advantage of the oil price fall to the public, instead raising taxes on petrol and diesel by up to 300%. With the current account deficit mounting and foreign reserves shrivelling, businesses and industries that were shut to contain the spread of the coronavirus have been allowed to start reopening. Pakistan agreed a $6 billion bailout from the International Monetary Fund last year and secured another $1.386 billion in rapid financing from the IMF at zero interest last month. Islamabad is hoping for more bailout packages from the World Bank and other development partners as it plans to file for debt relief from G20 countries and bilateral partners, mainly longtime ally China.

Pakistan's inflation eases as COVID-19 hammers economy

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