Inflation slowing in Brazil and China

Here are this month’s headline news from around the world. Find more analysis and views in this month’s Perspectives, available for online reading and downloading.

Inflation slowing in Brazil and China
Inflation rates have been coming down in several emerging nations, allowing monetary and political authorities to implement further measures geared towards supporting economic growth. India has proved the exception to the rule, with inflationary pressures on the rise again.

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After an encouraging upturn phase earlier in 2011 (+0.7%), the Irish economy shrank by 0.2% in Q4 2011, plunging the country back into recession.

Annualised number of building permits granted in the US in February, a rise of 5.1% on January levels and a 14.7% increase over 6 months. Unlike other statistics for the housing sector, building permits do not tend to be influenced by the weather (unusually mild winter this year in the US), making this recent upturn that much more encouraging.

Brazil’s rate of inflation slowed from 6.2% y-o-y in January to 5.8% in February. The Banco Central do Brasil is sticking with its inflation target of 4.5% for 2012.

9.9 million
Saudi Arabia’s current output of crude oil is running at around 9.9 million barrels a day. The authorities estimate production capacity at 12.5m barrels a day and have stated that output could quickly be ramped up to 15 million if needed. Libya looks set to export almost 1.4 million barrels a day in April.

Inflation fell in the UK from 3.6% y-o-y in January to 3.4% in February, its lowest rate since November 2010. Inflation dropped on the back of falling prices in the housing, electricity and cultural sectors.

China’s rate of inflation fell to 3.2% y-o-y in February, down from 4.5% in January. Growth in the M2 measure of the money supply quickened from 12.4% y-o-y to 13%.

The annual rate of inflation in India picked up speed again in February, advancing from 6.55% in January to 6.95%. The Reserve Bank of India has lifted key interest rates thirteen times since March 2010 so this latest surge in inflation has quashed any hopes of a rate cut to come.

For more, read the April 2012 edition of Perspectives available for online reading and as a printable PDF file.

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