Inflation is impacting almost everything and everyone, almost everywhere. Forecasters predict that the global economy is trending toward stable growth. Even as a commodity prices continue trending higher, economies are transitioning to a post-pandemic fiscal and monetary policies.
However, the conflict overseas will likely complicate Central Bank decisions as higher energy prices may interfere to sustain inflation.
But is higher inflation here to stay? The forecasts are as confusing as are the variety of proposed strategies that economists have put forward to stem the rise in cost of goods and services. There is not even consensus as to whether in this environment inflation is a bad thing or rather a sign of a healthy economy.
Plus, experts aren’t aligned on how long this inflationary period will last. At the outset Central Bankers described the inflation ‘blip’ as transitory as last summer we looked to be slowly coming out of the pandemic. But restrictions and supply-chain bottlenecks have gone on longer than originally forecast.
While supply/demand balance, with demand that could not be met, drove prices upwards, supply seems to be strengthening in some products to meet demand. But it doesn’t mean that the prices will come down, price will just stop rising.
According to the international monetary fund, year over year inflation is set to increase this year in 144 out 191 countries vs just 71 nations last year.