SINGAPORE -- Inflation is tapering off across Asia's emerging economies as crude oil prices stabilize and the currencies of developing nations regain their footing, giving room for the region's central banks to step back from last year's spate of monetary tightening.
Growth in consumer prices in India and the Philippines slowed for four straight months through February on a month-to-month basis, while Malaysia saw consumer prices fall 0.7% year on year in January, the first such decline in about nine years.
Though the slowdown in inflation removes a primary motivation for raising key interest rates, it is unclear whether the current stability will last, as goods prices remain highly prone to outside factors such as fuel prices and the actions of the U.S. Federal Reserve.
The Philippines earlier this month reported a headline inflation rate of 3.8% on the year in February, below the previous month's 4.4%. A government effort to fight inflation by expanding food imports bore fruit, with prices of food and non-alcoholic beverages rising just 4.7%, down from nearly 10% in September. Transportation prices grew just 1.2% as fuel became less costly.
The Philippine peso has also strengthened to around 52 against the dollar after relaxing to the 54-peso range at one point last year, a rebound that helped stabilize prices of imported goods.
Similar patterns played out across Asia, with Malaysia's January fall in prices owing heavily to a 7.8% decline in gasoline and other transportation-related prices. A slowdown in the rupiah's softening helped hold consumer price growth in Indonesia down to 2.57%, one of the lowest readings in a decade.
Inflation has also visibly slowed in India. With some exceptions -- like Turkey, where inflation approaches 20% -- inflation this year in emerging markets is set to hit some of the lowest levels in decades, according to Neil Shearing, chief economist at U.K.-based research firm Capital Economics.
Many emerging-market central banks hiked key rates last year in an effort to follow moves by the Fed, as well as to pump the brakes on inflation and support their currencies. The Philippines' Bangko Sentral ng Pilipinas, for example, hiked rates five times over the year as prices gathered steam through the fall.
But Manila has since backed off, and February's slowed inflation rate settled into the government's target range of 2% to 4%. Indonesia, which hiked rates six times last year, has held off so far in 2019. The Reserve Bank of India went so far as to cut key rates last month as inflation fears faded.
Still, with inflation so dependent on external factors, some are concerned that a rise in uncertainty in the global economy could reignite selling of emerging Asian currencies, spurring prices to rise once more.
A major benefit of having stable prices of everyday goods and services is that it eases the lot of consumers. Falling prices can increase consumers' buying power and heighten economic growth, Malaysian Finance Minister Lim Guan Eng has pointed out.
Meanwhile, inflation looks to be slowing in developed nations like the U.S. and parts of Europe as well, held back by low demand stemming from waning economic growth.
With factors like the U.S.-China trade war casting a pall of uncertainty over the global economy, widespread economic deceleration may keep inflation low for some time. Some see more emerging-market central banks cutting key rates in order to provide economic stimulation.