Food price inflation may peak by year-end, says Asean+3 Macroeconomic Research Office

Food price inflation may peak by year-end, says Asean+3 Macroeconomic Research Office

Asean 3 Macroeconomic Research Office (AMRO) is expecting food price inflation to peak at the end of this year. — Picture by Ahmad Zamzahuri

Wednesday, 21 Sep 2022 5:58 PM MYT

JAKARTA, Sept 21 — Asean+3 Macroeconomic Research Office (AMRO) is expecting food price inflation to peak at the end of this year.

In a note today, the regional macroeconomic surveillance organisation said some economies have implemented temporary policy interventions such as price controls to keep food prices stable or rising too rapidly.

“As global food price shocks are transmitted to the region with a lag, we can expect the peak effects of the region’s food price inflation and headline inflation towards the end of this year,” AMRO said.

It highlighted that food price inflation in Malaysia, which is a net food commodity exporter, has risen to the highest rate driven by elevated prices for meat, fish, and seafood, which are mostly imported.

AMRO also projects that global food prices may ease in 2023 as global demand softens but stay elevated for the rest of this year amid persistent supply disruptions and uncertainties from the ongoing war in Ukraine, as well as ever-present risks of unfavourable weather and livestock diseases.

It said policymakers’ efforts should focus on avoiding hoarding behaviour and providing targeted support to needy households, such as temporary cash transfers or subsidies, to keep prices from rising severely.

“Over the longer term, efforts could focus on enhancing social assistance schemes and increasing the food supply by supporting domestic production and improving food distribution efficiency,” AMRO said. — Bernama