During the financial turmoil, commodity prices may have been pushed higher to some extent by increased demand for commodities as a hedge against a depreciating US dollar and possibly also as a hedge against higher inflation. As global growth slows, a fall in commodity prices represents a downside risk to commodity-exporting EMEs, which is particularly relevant for some Latin American EMEs.
Some of the increased inflation over the past year was driven by sharp increases in energy prices. During the late summer, oil prices did decline somewhat, slowing price increases, but unfortunately, they have been rising again and crude oil prices are now over $ a barrel and gasoline prices are rising.