ISA Economic Data Release - 20 January 2023

Highlights From the Past Week

Japan has long been synonymous with deflation, with inflation averaging just 0.2% per year in that country between 1992 and 2021. However, inflation rates have risen sharply in Japan in recent months. Last month, inflation in Japan rose to 4.0% year-on-year due to a weak yen, higher commodity prices and rising energy costs in Japan.

 

After trending downwards for much of the second half of last year, oil prices have trended back upwards so far this year. Over the past two weeks, oil prices have risen by more than 10%. Much of this increase was driven by the belief that demand for oil in China will rise now that the country has reopened to the world.

 

More than one million people took to the streets of France to protest against plans by President Emmanuel Macron to raise that country’s retirement age from 62 to 64. The cost of France’s retirement benefits are becoming increasingly difficult to bear for the French government.

 

After a run of strong growth, Taiwan’s economy came to a crashing halt in the fourth quarter of 2022. During that period, Taiwan’s economy contracted by 0.9% on a year-on-year basis. This poor result was due to a sharp fall in exports from Taiwan in the final months of last year. Also, consumer spending and capital formation both weakened in late 2022.

 

A Look Ahead

 

The debate in France over the retirement age and benefits reflects the fact that too many countries in the world have retirement systems in place that are financial unsustainable over the longer-term.

While inflationary pressures have been easing in North America and Europe in recent months, they continue to rise in many parts of Asia, signaling that the global battle against inflation is far from over.