High energy prices appear to be feeding into a negative cycle of persistent unemployment and depressed housing prices in the US and UK, while the prospect of sovereign default and its real and financial consequences dominates the European policy discussion.
In contrast, emerging Market Economies (EMEs) are showing symptoms of demand-driven inflationary pressures, which have, over the past several months, been exacerbated by rising global commodity prices. Apart from all the other things that are going on in the global environment, commodity prices have played a key role in India’s inflation over this period.