Jose Sanchez
Research expert covering society, economy, & politics for Latin America
Inflation worldwide - statistics & facts
Soaring inflation rates have dominated the news recently, and the galloping price levels have a direct impact on people’s lives. Many are struggling to make ends meet, and some have even been forced to choose between a warm meal and a warm living room. Especially gas and electricity prices have soared since Vladimir Putin decided to launch a full-scale Russian invasion of Ukraine in February 2022, but also prices of food have reached record heights. Is the Russia-Ukraine war the only cause of the high inflation, or are there other factors involved? And what are governments doing to dampen the price increases?
How coronavirus and the war in Ukraine drove inflation
Global inflation rates started increasing even before the outbreak of the Russia-Ukraine war. As production and transport was brought to a halt in 2020 after the outbreak of COVID-19, it took time to bring production to a normal level as demands increased. Moreover, China's no-covid strategy, which was upheld until January 2023, with lockdown of complete cities such as Shanghai, resulted in continuing production disruptions. Furthermore, the Russian invasion of Ukraine affected especially certain food products such as wheat and corn, as well as energy sources such as natural gas. The rising inflation and leaping energy bills cause concerns among people worldwide.What is inflation?
Inflation is the phenomenon of prices increasing for all goods. Most central banks have a target of low and constant inflation, generally between 1.5 and four percent per year. Hyperinflation, the extreme example of this phenomenon, can lead to total economic collapse as the currency loses value so quickly that it essentially becomes worthless.Inflation slowing through 2023?
As a result of the leaping inflation rates, central banks around the world rose interest rates. Through this, they were hoping to encourage people to reduce spending, thus reducing the pressure on the economy. The measure seems to have had a positive effect on dampening inflation, as inflation rates were falling in major economies through the first half of 2023. Further forecasts estimate that global inflation will continue to slow through 2023 and 2024, thereby offering a cause of optimism for consumers around the world.
