Central banks on back foot in inflation fight

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news that so far, central bank brakes on inflation or optimism don't seem to be working yet.</p><p>First up today, global food prices were stable in February from January according to the <a href="https://www.fao.org/worldfoodsituation/foodpricesindex/en/" target="_blank"><strong>FAO monitoring</strong></a>. That puts them -8.1% lower than year-ago levels when they were rising sharply. They are now -19% below their March 2022 peak and back to levels we first saw in October 2021.</p><p>In China, their National Congress, which marks the end of the road for Premier Li, is underway in Beijing, and has set its lowest economic growth target in decades, aiming for "<a href="http://www.ce.cn/xwzx/gnsz/szyw/202303/05/t20230305_38425907.shtml" target="_blank"><strong>about +5%</strong></a>" GDP growth this year, a relatively conservative target for them. But this comes after just a +3% advance in the tough 2022 year wracked by pandemic and big-power rivalry stresses - not to mention the property sector woes which are still high on their risk agenda.</p><p>But they are off to a positive start. China's private <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/65cf91b9c01f45e5a2e8f99b1c42ffef" target="_blank"><strong>Caixin service sector PMI</strong></a> reported a good expansion in February, a bounce-back from January and confirming the official measure. New orders and employment rose in a direct response to their re-opening.</p><p>The expansion in the services sector was even stronger in <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/8dec781612134e4dba8c7dfa30b08ddf" target="_blank"><strong>India</strong></a> in February, out-shining both the US and China.</p><p>Singapore is doing it tough however. <a href="https://www.pmi.spglobal.com/Public/Home/PressR