Inflation in emerging markets has fallen below 3% again on average. As today’s chart shows, headline inflation has been declining over the last ten years to the threshold of 3% or just below it. This means emerging markets are no longer ‘exporting’ inflation to developed markets, pushing the CPI down as well.
China is a key example of an emerging market that is no longer pushing global inflation up as it shifts from an investment- to a consumer-driven economy. This isn’t making the lives of central bankers any easier.