Alex Dudov
On a global scale, inflation is not uniform across regions - in many developed and emerging economies, recent data is an indication that prices are rising. For many countries, the data is higher than people predicted it would be in the past.
Global Overview
The most recent reports are an indication that inflation is higher in most countries than it was in previous reports. In large economies like the United States, the Eurozone, the United Kingdom besides Canada, the rate of inflation is above 2 %. In those areas the direction of the data is upward.
The rate in the United States is at 3.3% and is moving higher. In the Eurozone or Germany, the rates are between 2.6% and 2.7% - those areas are also where prices are rising again. In the United Kingdom, the rate is 3.3%, which is the same as the rate in the United States. Due to the figures, inflation is a situation that exists in many developed markets at the same time.
Emerging Markets Divergence
In emerging markets, the data is different depending on the country. For countries like Turkey next to Argentina, the rates are 31 % and 33 %. While those rates are high, they are lower than they were in the past - but in India besides Brazil, the rates are 3.4% and 4.1%. In the economies, prices are rising again after they were steady for a period.
There are multiple economies in Asia where inflation is at a lower level. In China, the rate is 1.0%. In Thailand, the rate is -0.1%, which means prices are falling. As is the case elsewhere, the data in Asia is not the same everywhere. For Japan or South Korea, the data is an indication that inflation is moving higher.
What's Driving the Trend
When inflation rises in many regions, it is a sign that the global reduction of inflation is stopping. There are multiple reasons for this situation. If demand is strong, if workers receive higher pay and if there are limits on the supply of goods, prices stay at a high level - this is true even when central banks try to keep interest rates high.
If inflation is persistent, it is not likely that central banks will lower interest rates by large amounts soon. By staying at this level, inflation creates a difficult environment for stocks. At the same time this situation is beneficial for commodities and assets that people use to protect against rising prices.
Conclusion
To some observers, prices are steady or falling in certain regions. And yet the data as a whole is an indication that inflation is a matter of concern for the world. With inflation rising in many countries, central banks are likely to be careful. Because price increases are still happening, the process of reducing inflation is not finished.
Alex Dudov
