G8 nations warn of stagflation

G8 nations warn of stagflation
Malaysia Sun
Monday 16th June, 2008

Finance ministers from the Group of Eight nations have warned the global economy risks a dose of stagflation as commodity prices soar.

Stagflation is a period of inflation combined with slow economic growth and rising unemployment.

G8 officials ended talks in Osaka, Japan over the weekend, by saying record fuel and food costs were threatening to increase inflation, posing a challenge to growth.

The members said they could see stagflation eclipsing the credit squeeze, with commodity prices powering ahead.

Economist figures show that consumer prices last month rose the most since 1997 in the UK while US inflation gained 1 percent from April.