Eastspring Investments: Iran Conflict Expected to Raise Inflation by 0.4 Percentage Points

Eastspring Investments has projected that inflation in major global and Asian economies is likely to increase by an average of 0.4 percentage points due to the ongoing conflict in Iran. According to Jin10, the persistent rise in energy prices is expected to gradually influence central banks' inflation expectations worldwide. While most Asian economies are unlikely to cut interest rates in the short term, policy tensions may escalate over time. In the stock market, a further correction is anticipated as the focus shifts from inflation to growth concerns. Additionally, fluctuations in oil prices could lead to varied industrial production outcomes among Asian manufacturing economies. However, the robust demand for AI-driven technology is expected to continue supporting North Asian tech exporters.