Bond.az - Goldman Sachs reports inflation pressures are intensifying across Asia-Pacific economies following the Iran war and closure of the Strait of Hormuz, with the sharpest increases in lower-income nations.
The firm's commodity strategists raised energy price forecasts substantially since the war began and project Brent crude at $90 per barrel in the fourth quarter, with upside risks to that forecast. Import prices, producer prices and retail fuel prices have risen sharply across Asia since late February, though subsidies have moderated or capped retail fuel prices in some countries.
Headline and core consumer price inflation now stand at or above central bank targets in most economies. In Australia and the Philippines, both measures exceed the top of the central bank's inflation target band. Before the war, CPI inflation was broadly in line with or below targets in most countries.
Inflation pressures are particularly acute in the Philippines, Thailand and Vietnam, where seasonally-adjusted CPI inflation over the past three months runs well over 10% annualized. These lower-income economies have more limited subsidies to cushion energy price increases.
Goldman Sachs' 2026 CPI forecasts remain above consensus in India and most of Southeast Asia but align with consensus elsewhere in the region. Wage inflation has remained stable or lower in most countries, though Korea and Indonesia showed pickup in wage growth through February data.
