In the wake of the protests in Egypt, the focus has been sharply on Middle Eastern countries that may have similar problems with food inflation and repressive regimes.
And while there are many examples in that part of the world, another region has serious food inflation problems that could spark discontent there.
South East Asia’s food inflation problem is staggering, particularly when you consider the weight of food and energy on each country’s headline CPI.
The problem is that the Western perception of food and energy prices is that they are non-core, too volatile, and should be ignored when considering inflation. But in developing markets like those in South East Asia, food and energy sometimes make up more than 50% of the basket of costs factored into the country’s CPI, according to Standard Chartered (via Zero Hedge).
Examples of this are India, Indonesia, and the Philippines. Malaysia, Vietnam, Singapore, and China are not far behind.
Vietnam seems a likely flash point. Non-core (food an energy inflation) up 13.1% year-over-year, weighted nearly half of the CPI, with a communist government, a weakening currency, and a troubled public sector.
Photo: Standard Chartered