Inflation Threatens the Developing World

The Economist warns that rising inflation could threaten the positive economic gains made by developing nations in recent years. The developed world faces economic challenges also; however, despite worries among central bankers, inflation does not look to pose a serious threat to prosperity. In the developing world however, extremely low interest rates coupled with rising food and gas prices could form a perfect storm, triggering massive inflation. According to the article,

"in countries such as China, India, Indonesia and Saudi Arabia even the often dodgy official statistics show prices have risen by 8-10% over the past year; in Russia the rate is over 14%; in Argentina the true figure is 23% and in Venezuela it is 29%. If you measure the numbers correctly, two-thirds of the world's population will probably suffer double-digit rates of inflation this summer.Developing nations will likely be forced to tighten their monetary policies if they are to stave off this crisis."

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