Inflation, stagflation, deflation impacting global economy: Nataxis

HONG KONG - The state of the global economy is revealed by the inflation situations in the major regions, according to global asset manager Nataxis. It says emerging countries, excluding China, are in stagflation - slower growth and inflation due to a number of bottlenecks, which is hampering production.

“China and Japan are in different types of deflation: the decline in activity in China is a result of the deterioration in cost competitiveness, leading to capacity underutilisation and falling prices; the decline in activity in Japan is a result of the distortion of income distribution at the expense of employees, leading to falling demand and prices,”Nataxis says.

“OECD countries other than Japan are in moderate, non-inflationary growth, thanks to the fall in commodity prices caused by a slowdown in growth in emerging countries (which has also led to a deterioration in the situation of commodity-exporting countries), and also because of changes in the functioning of the labour market as wage earners' bargaining power has been weakened.
“The global economic situation is therefore the result of a mix of three heterogeneous situations. In all three cases, sluggish growth; but in two cases, absence of inflation; and in one case, high inflation.” www.ngam.nataxis.com (ATI).