The Disinflation Story: More Evidence

May 17, 2013

This article updates an earlier blog entry posted two weeks ago.  The latest exhibit of global disinflation comes from Canadian April consumer price data released today.  On-year total inflation in Canada of 0.4% was sharply less than the 2.0% 12-month increase in the year to April 2012.  Excluding food and energy, consumer prices advanced 0.7%, down from 1.9% in the year to April 2012.  The core CPI measure used by the Bank of Canada for policy guidance with a medium-term target of 2.0% was 1.1%, down from 2.1% in the year to April 2012.

Canada’s experience of significantly lower CPI inflation has plenty of company from a diverse range of nations representing all regions around the world.  In the latest reported statement year, the U.S. rate was 1.1% in April, down from 2.3% a year before. Euroland Inflation was 1.2% compared to 2.6% a year earlier, and the Ezone core rate slowed to 1.0% from 1.6%.  Within the common currency bloc, the German inflation rate fell to 1.2% from 2.0%.  France saw a 0.7% inflation pace most recently, which was a third as big as in the prior year.  Italy’s pace was more than halved to 1.4% from 3.3%, and Spanish inflation slowed to 1.4% from 2.1%.  Greek inflation swung from 1.9% to minus 0.2%.

Among some non-euro area economies in Europe, inflation dropped to 2.8% from 3.5% in Britain, to 1.7% from 3.5% in the Czech Republic, and by 1.8 percentage points to minus 0.5% in Sweden.  Swiss consumer prices have dropped in consecutive statement years, first by 1.0% in the 12 months to April 12 and then by 0.6% in the year to April 2013. 

Japan likewise experienced a drop in consumer prices of 0.5% in the year to March 2012 followed by a 0.9% decline in the more recent twelve months to March 2013.  Chinese CPI inflation decelerated by a percentage point to 2.4% last month form 3.4% in the year to April 2012. Singapore inflation slowed 1.7 percentage points to 3.5%, and South Korean inflation was halved from 2.5% to 1.2%.  Pakistani inflation was halved from 11.3% to 5.8%, and the Israeli inflation rate of 1.3% in the year to March was down from 1.9% a year before.

In Latin America, Chilean CPI inflation of 1.0% currently is way down from 3.5% a year earlier.  Colombian inflation dropped to 2.0% from 3.4%.

The price of gold, which is strongly influenced by inflation expectations, is 13.5% weaker than a year ago.

 Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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