East Asia Econ

Region – policies to control energy prices

Some charts on regional energy supply and government attempts to cushion the impact of rising energy prices since 2022. Rough rule of thumb: spending 1% of GDP on energy subsidies leads to a reduction in headline CPI inflation of around 1ppt.

Paul Cavey

Mar 30, 2026 • 3 min read

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Last week, next week

This week's three themes: 1) rising inflation despite government attempts to hold prices down; 2) growth that might be starting to wobble but hasn't clearly turned down yet; and 3) huge uncertainty about the direction of events in the Middle East.

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East Asia Today

The impact of the oil price spike is starting to be seen, with inflation expectations rising and sentiment falling in the business survey in Korea, and the consumer survey in Taiwan. Also today, 10-day exports and underlying inflation in Japan, and profits in China. In total, 24 charts.

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Korea – prices up, sentiment down

The easy takeaway from the rise in prices and fall in sentiment in the BOK's business sentiment survey for March/April is stagflation. I think there are reasons as yet to discount the idea that activity has slowed, but if that is right, then the rise in inflation makes BOK rate hikes more likely.