Russia’s invasion of Ukraine has stubbornly settled inflation in countries around the world.
Prices went up last year Supply chain blockageShutdowns and rising energy costs associated with Covid-19 — issues expected to decline in 2022.
Six months ago, the Organization for Economic Co-operation and Development estimated that inflation rarely exceeds 6% in any of the 38 member states. The main exceptions are Turkey and Argentina, which have already been fighting runaway inflation, which has little to do with pandemics.
Since then, Sanctions against Russia, One of the world’s top energy and grain producers, is driving up food, fuel and fertilizer prices. Russian bombings, blockades, seizures, Grains from UkraineAnother top producer, raising the ghost of famine The poorest food importing country..
At the same time, China’s policy of blocking areas with Covid-19 outbreaks exacerbated the problem.
This week the OECD announced Sober update.. Inflation is expected to exceed double digits in seven countries in Eastern Europe. This year’s Dutch estimate has almost tripled to 9.2%. Australia doubled to 5.3%.And like AmericaIf inflation rises 8.6% until May, UK Inflation has hit a 40-year high in Germany, well above previous expectations.
While this hinders corporate investment and job creation efforts, it can eat up household income and savings.
Central banks in the United States, United Kingdom, Australia and India have all been actively working lately to curb sharply rising prices by raising interest rates. Even the European Central Bank, which was reluctant to raise interest rates for fear of triggering a recession, closed its asset purchases on Thursday. Raise its major interest rates A quarter point at next month’s meeting, maybe even more in September.
However, there are limits to what political and financial leaders can do about rising inflation, especially given a variety of causes. In many regions like Europe, inflation is caused by sharp rises in food and energy prices. The OECD warned that raising interest rates would not solve the underlying supply problem.
In contrast, the organization has partially condemned inflation in the United States.Excessive demand, “This is more sensitive to stricter monetary policy. Compared to Europe, the US labor market is tighter and nominal wage growth is higher.
Inflation causes severe pain in several places, but long-term predictions are more positive. The World Bank expects global consumer price inflation to fall below 3% next year.