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The inflation story in emerging markets remains highly differentiated, but the pandemic caused a sharp decline that was felt across all regions.
Food inflation has been rising across major emerging markets. However, several local factors impact food inflation, and the causes of higher prices have not been homogenous across regions.
We conclude that inflation pressures, in general, are not a major concern for EMs, but need to be analyzed on a case-by-case basis and with special emphasis on countries’ respective output gaps.