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Stagflation Now Global Concern: Sakakibara

May 22, 2008

TOKYO (Nikkei)--Stagflation has become a global concern on the back of rising oil prices, Eisuke Sakakibara, former vice finance minister for international affairs, told a Tokyo forum Thursday.

"Large amounts of speculative funds are flowing into the commodities markets as the U.S. housing market plummets and the U.S. economy slips into a recession, sending crude oil prices to record highs and raising concern over the possibility of global stagflation," he said at The Future of Asia forum organized by Nikkei Inc.

"The credit crunch triggered by the U.S. subprime mortgage meltdown seems to be the worst crisis of its kind since the end of World War II," he added.

Sakakibara is currently a professor at Waseda University.

Titles of speakers, names of companies, etc., were correct as of the time when the forum was held.