Rising cost of living puts Asian policymakers in the hot seat

Second K-shaped shock to hit low-income households after the pandemic

Sonal Varma and Si Ying Toh

April 20, 2022 05:00 JST

Shoppers purchase packets of vegetable oil at a supermarket in Mumbai on March 7: Higher food prices can lead to higher inflation expectations. © Reuters

Sonal Varma is chief Asia economist and Si Ying Toh is an analyst, both at Nomura Holdings.

Policy trade-offs are rising in Asia. The Russia-Ukraine war, a weaker economy in China and a hawkish U.S. Federal Reserve pose both upside risks to inflation and downside risks to growth. The optimal policy response to these conflicting shocks to growth and inflation is unclear.