Increases in consumer price inflation have been particularly large in AxJ economies.
This growth in producer prices has been similar across developed economies and AxJ (figure 6).
Recent years have also seen an acceleration in export price inflation in both developed economies and in AxJ. As with consumer prices, increases in export price inflation have been largest in AxJ economies, which have shifted away from 'exporting deflation' as they tended to do in the mid-1990s and early 2000s (figure 7).
While the average rate of export price inflation has increased in AxJ, there is some uncertainty about what has happened to export prices from China, our second-largest market for imports.
These slowdowns were particularly pronounced in AxJ economies (figure 9) and have been linked to demand-related easing in import and commodity prices (HSBC, 2008).
Notably, AxJ experienced more consistent growth than it did between 1997 and 2003.
One reason for this is that the robust growth seen in AxJ and emerging markets has resulted in structural increases in demand for resources, particularly fuel (figure 10).
This has been seen most clearly in AxJ, where inflation has risen to elevated levels even excluding the direct effects of higher food and fuel prices (figure 12).
The resulting increases in costs of production have been important contributors to increases in consumer prices and export prices in all our trading partner economies, not just those in AxJ.
But while inflation remains relatively low, increased strength in global activity (particularly the sustained strength in AxJ has contributed to an increase in global inflation pressures and commodity prices since 2004.