Page 8 - AEI Insights 2020 - Vol. 6, Issue 1

AEI Insights, Vol 6, Issue 1, 2020

Countries Mean Maximum Minimum Standard
deviation

Brunei 6.3 9.3 5.3 1.0
Indonesia 5.6 8.0 3.9 1.3

Cambodia 1.6 3.5 1.0 0.5
Lao 1.3 2.6 0.6 0.6

Malaysia 3.2 3.6 2.4 0.3
Myanmar 1.0 1.5 0.7 0.1
Philippines 3.3 4.0 2.5 0.3

Singapore 4.2 5.9 2.7 0.9
Thailand 1.3 3.4 0.4 0.8

Vietnam 1.9 2.8 0.9 0.5
Table 1: Main indicators of unemployment in ASEAN

On the other hand, labour demand is a derived demand. An increase in the demand of products
would cause an increase in labour demand. In this sense, the inflation rate can indicate a balance
between product demand and supply. If the money supply is constant and product demand is
largely greater than the product supplied, there are higher inflation rates. The inflation rate in
ASEAN countries for the period of 1995 to 2017 depicted in Figure 2 and the main indicators
of inflation are reported Table 2. As the figure clearly indicates, four ASEAN countries, namely
Indonesia, Lao, Myanmar and Vietnam, suffered from high inflation problems. Due to the
Asian economic crisis in the end of the 1990s, Indonesia’s inflation rate was 19.9 percent in
1998 and decreased to 5.0 percent in 2001. The country’s inflation rate increased again from
3.5 percent in 2004 to 9.0 percent in 2006. In the case of Lao, inflation rate rapidly increased
from 1.9 percent in 1997 to 8.1 percent in 1998 and rose further to 21.4 percent in 1999. The
country’s inflation rate increased again from 3.7 percent in 2001 to 5.5 percent in 2002, further
to 8.8 percent in 2003. Myanmar’s inflation rate also increased rapidly from 3.8 percent in 2005
to 8.9 percent in 2006 and rose further to 18.7 percent in 2008. The inflation rate in the country
increased again from 1.5 percent in 2012 to 5.6 percent in 2014, further to 11.2 percent in 2015.
In the case of Vietnam, its inflation rate jumped from 4.5 percent in 2005 to 16.1 percent in
2008, further to 18.6 percent in 2011. Among the ASEAN countries, Cambodia and the
Philippines have moderate inflation rate and their average inflation rates are around 3 percent.
In the case of Cambodia, its inflation rate increased rapidly from 4.1 percent in 2006 to 19.3
percent in 2008 and decreased to 3.8 percent in 2010. The country’s inflation rate in 2010s
were around 3 percent. In the case of the Philippines, its inflation rate increased slightly from
2.4 percent in 2004 to 4.3 percent in 2006 and increased further to 7.0 percent in 2008. The
central banks in three ASEAN countries, namely Malaysia, Singapore and Thailand, have
successfully managed to keep inflation low. Their average inflation rates are around 3 percent.
Malaysia’s inflation increased slightly from 1.9 percent in 2004 to 3.1 percent in 2006 and rose
further to 5.0 percent in 2008. Similarly, inflation rate in Thailand increased slightly from 2.2
percent in 2004 to 4.0 percent in 2006, and further to 5.0 percent in 2008. Singapore’s inflation
increased from 0.5 percent in 2009 to 2.7 percent in 2010, and further to 5.3 percent in 2011.
It should be noted that the problem of the price level in Brunei is not inflation, but deflation.

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