Rising Prices and Decreased Purchasing Power: The Economic Crisis Deepens in Asian Countries

SadaNews - The economic repercussions of the ongoing war in the Middle East continue to impact major Asian markets, evident through rising prices in various sectors and disruptions in energy markets and stock exchanges in several countries.

In this context, the People's Bank of China warned of the possibility of structural inflation transforming into widespread inflation if the war in Iran continues. This is the second such warning, according to Al Jazeera's bureau chief in Beijing, Shaimaa Joui.

Shaimaa stated that the bank is referring to widespread inflation that could affect the Chinese economy if the global price of oil reaches $120 per barrel.

The Chinese bank claims it has sufficient tools to deal with the crisis in its current phases, which is structural inflation. However, it would be difficult to manage widespread inflation with the currently available tools, necessitating a new monetary policy to address the situation.

Shaimaa reported that China has not yet resorted to its strategic and commercial reserves in oil, but it will do so if the war on Iran persists, noting that the repercussions of the crisis affect many vital sectors in China, such as steel, with the Middle East accounting for about 42% of China's total exports of it, in addition to aviation and maritime shipping.

In Japan, energy markets are experiencing a crisis due to rising fuel prices and supply disruptions, as the two main airlines announced today an increase in fuel surcharges on international flights. Al Jazeera's correspondent in Tokyo, Maha Matsumura, stated that the increase ranges between 70% and 90% starting from June.

The correspondent reported sharp fluctuations in the Tokyo Stock Exchange during morning trading, where it rose to an all-time high of 5% before declining following the recent speech by U.S. President Donald Trump, which indicated the continuation of the war on Iran.

Decreased Purchasing Power

Japan has begun to feel many economic repercussions, including a shortage of oil derivatives necessary in the health and agriculture sectors, and is considering supplying the markets with more of its oil reserves in May, as reported by the correspondent.

In Pakistan, the statistics office and the consumer price index recorded an inflation increase of 0.3% during March.

Abdul Rahman Matar, Al Jazeera's bureau chief in Islamabad, stated that inflation is the defining issue of the moment in Pakistan, where prices have risen by 7.5%, according to official figures, and are expected to reach 8.5%.

The purchasing power of Pakistanis has diminished due to rising prices of food and consumer goods resulting from increased fuel costs and dwindling reserves of oil derivatives in Pakistan, as Matar noted.

In light of the economic repercussions of the war, the Malaysian government has taken measures to rationalize the consumption of fuel and essential goods, deciding to implement remote work for government employees and public sector companies, instead of using public transportation and private cars, starting from the middle of this month.

The director of Al Jazeera's bureau in Malaysia, Samer Allawi, indicated that the measures aim for two objectives: the first is to rationalize spending on all goods, and the second is security-related, involving declaring a state of alert in the coast guard to prevent the smuggling of gasoline and diesel to neighboring countries, particularly the Philippines and Thailand.

Source: Al Jazeera