Intensifying global competition may also be limiting the ability of domestic firms to hike prices as well as wages. Competitive pressures here and abroad should continue to act as a restraint on inflation in the months ahead.
The growth pattern of high consumption and low savings of some economies can hardly sustain, and must be reviewed. The current situation in the U.S., however, does not present itself as the optimal time to raise its savings ratio, and policy makers are expected to strike a balance between increasing savings and stimulating consumption to facilitate the economic recovery.