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OPEC pours inflation fuel onto Covid fires

TOKYO – If OPEC’s plan is to derail economic recoveries from China to the US, then this relic of the 1970s is off to a smashing start to 2021.

Even deflation-plagued Japan is at the statistics board, penciling in jumps in energy-driven producer costs that get it closer to a 2% consumer-price level than it’s been in 30-plus years.

There are few more sobering reminders of how fragile post-Covid-19 recoveries are than oil surging to US$100 per barrel.

“Undoubtedly, the rise in crude will lift inflation until the end of the year,” says economist Lee Hardman at MUFG Bank.

And what about after that? Welcome to Asia’s hellish balancing act.