FINANCIAL AND ECONOMIC SITUATION IN THE REGION AMID DECLINING INFLATION AND RISING DEFLATIONARY PRESSURES
E. Ya. ARAPOVA
Candidate of Economic Sciences
MGIMO (U) of the Russian Foreign Ministry
Keywords: East Asia, monetary policy, fiscal policy, inflation, demand, economic growth
In June 2015, the Bank of Japan announced that it would maintain its economic policy aimed at stimulating domestic consumption and adopt a package of measures aimed at easing monetary policy in October 2015. Low inflation, and in some years - the growth of deflationary pressure, for many years is a characteristic feature of the country's economy. However, in recent years, this trend has spread to other East Asian countries, which encourages them to develop a set of economic policies aimed at stimulating domestic demand and overcoming structural imbalances in national economies.
In the context of declining world trade growth, declining export revenues and a positive trade balance in some East Asian countries, and in some cases, the accumulation of deficits, while maintaining the same level of capacity utilization and in some cases insufficiently rapid growth in domestic demand and a high rate of savings of the population, a number of countries in this region faced a drop in inflation indicators and an increase in deflationary pressure.
Although relatively low inflation rates may help raise real incomes, their sharp decline in recent years indicates the accumulation of internal imbalances in the economies of East Asian countries and the excess of supply growth over demand growth.
The rate of decline in inflation in the developing countries of the East Asian region in recent years has been significantly higher than its decline in the Asia-Pacific region (APR) and the world as a whole (see chart).
The inflation rate in the group of East and North-East Asian countries was significantly lower than in the Asia-Pacific region as a whole. There, the relatively low values of inflat ... Read more