Governments in Asia have a more targeted approach to battle inflation. Export bans and price controls are some of them. Although inflation is a risky problem in Asia, the governments’ measures have helped the countries to survive from price rises and the rise of interest rates in the central banks. Many of the efforts have also helped lift the cost burdens away from both customers’ sides as well as small business in the balance sheet.
Inverter relations officer at Mayora Indah, Baskoro Santoso, noted the situation by saying that there are no weak signals from purchasing power. This is because the company has adjusted prices prior to the second half of last year. However, they have not seen any material hit to business. It also does not impact the market during Ramadhan period.
Indonesia for instance, has a perennial issue on financial volatility as well as price swings. Last week only, the energy subsidy was hiked by $24bn to contain energy costs. Although, it was during the controversial export ban on palm oil. Retailers in Southeast Asia has encountered price hikes. However, it does not affect household demands at all. Inflation also remains at 2-4% in central banks’ target band.
Another epitome is in South Korea. Government caps on electricity bills have supported a competitive environment for the global manufacturers. The examples are Samsung Electronics and Hyundai Motor. The government cap supports the hit to households’ disposable incomes.
These caps do not minimize the state-run power utility at Korea Electric Power Corp. It reported many quarterly losses on high fuel import costs. Thus, it increases the chance of a government capital infusion. India also banned wheat exports and curtailed output as wheat prices soar. Malaysia also stopped exporting 3.6m chickens until the price is stable.
