But the Bank of Japan has a tough fight ahead of it when it comes to beating back deflation. Japan’s core year-on-year gauge of prices declined 0.3%, showing that deflationary tendencies are still strong.
Reliance on foreign oil imports, along with the current surge of Indian gold mania, drove India’s balance of payments to a record low of $32.6 billion during the fourth quarter, or 6.7% of GDP. The growth of the deficit, which needs to be paid for either through additional borrowing or through a bit of inflation, has been putting pressure on the rupee.
The US is a rare source of strength among the major world economies, and consumer spending is its cornerstone—worth about 70% of GDP. So it’s a good thing to see that consumer spending posted a better-than-expected rise in February, increasing by a seasonally adjusted annualized rate of 0.7%, versus a 0.4% gain in January. For an in-depth look at US consumers, click here.