Savitri Era of those who adore, Om Sri Aurobindo and The Mother.

Tuesday, April 08, 2008

Dollar’s weakness is itself a cause of inflation in developing countries

Asian Inflation Begins to Sting U.S. Shoppers By KEITH BRADSHER NYT: April 8, 2008

The free ride for American consumers is ending. For two generations, Americans have imported goods produced ever more cheaply from a succession of low-wage countries — first Japan and Korea, then China, and now increasingly places like Vietnam and India.
But mounting inflation in the developing world, especially Asia, is threatening that arrangement, and not just in China, where rising energy and labor costs have already made exports to the United States more expensive, but in the lower-cost alternatives to China, too.
“Inflation is the major threat to Asian countries,” said Jong-Wha Lee, the head of the Asian Development Bank’s office of regional economic integration.
It is also a threat to Western consumers because Asian exporters, even in very poor countries, are passing their rising costs on to customers...

“Rising inflation is a way of life in China these days, you see it everywhere,” said Faye Kong, the company’s international business supervisor...In addition to the weak dollar, economists say that countries like Vietnam, Egypt, China and Brazil are inherently more vulnerable to inflation when, as now, rising prices are led by increasingly expensive commodities.

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