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Subdued inflation in ASEAN countries augurs central bank inaction

Indonesia and Thailand experience weak price rises amid slow recovery from COVID

Southeast Asian central banks are forecasting subdued inflation. (Source photos by AP and Akira Kodaka)

JAKARTA -- Amid weak domestic recovery from COVID-19, countries in Southeast Asia are experiencing subdued inflation, and so their central banks are likely to keep their benchmark interest rates unchanged for now.

To be sure, economywide headline inflation has been creeping up due to global inflationary pressures like supply chain bottlenecks and higher fuel prices, but price rises in major Southeast Asian countries such as Indonesia, Malaysia and Thailand have remained below or in line with their central bank's inflation target, a stark contrast to developed nations like the U.S. and the U.K., which have seen their headline inflation hit multiyear highs.

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