The cost of living for people has risen sharply all over the world. global inflation, rate to which they climb prices, is at its highest point since 2008.
At Peru, inflation for 2021 closed at 6.43%, the highest in 13 years, temporarily above the target range due to factors such as the increase in international prices of food supplies and fuels, as well as the exchange rate.
In the richest countries in the world, the highest inflation of the last 25 years was registered in 2021, according to data published last Tuesday, January 11, by the Organization for Economic Cooperation and Development (OECD). Below you will find some of the reasons.
Increase in energy and gasoline prices
At the beginning of the pandemic, prices of Petroleum they plummeted, but demand has since soared and hit a seven-year high this week.
The price of gas has also risen sharply, leaving people around the world with eye-watering central heating bills.
Demand from Asia has pushed up prices, along with a cold winter in Europe last year that depleted gas reserves.
Shortage of goods
The price of many everyday consumer goods also spiked during the pandemic.
Manufacturers in places like Asia, many of which faced closures due to restrictions from the COVID-19, have had trouble keeping up with demand ever since.
This situation has caused a lack of materials such as plastic, concrete and steel, which has pushed up prices. Wood cost up to 80% more than usual in 2021 in the United Kingdom and fetched more than double its regular price in the EE. UU.
In addition, there is a shortage of microchips, which are vital components in cars, computers, and other household items.
Shipping costs
Global shipping companies, which move goods around the world, have been overwhelmed by increased demand after the pandemic.
It means that retailers have had to pay a lot more to get those products into stores. As a result, prices have been passed on to consumers.
Shipping a single 40-foot container from Asia to Europe currently costs $17,000, more than 10 times more than the previous year, when it cost $1,500.
Transportation bottlenecks appeared to be easing in December, and the US began to overcome record congestion at its ports.
salary increase
Many people have dropped out of the workforce or changed jobs during the pandemic.
In the US, more than four million people quit their jobs in April, according to the Labor Department, the largest increase on record.
As a result, companies are having trouble hiring staff such as drivers, food processors, and restaurant servers.
Therefore, they have had to increase salaries or offer hiring bonuses to attract and retain staff. McDonald’s and Amazon offer signing bonuses ranging from $200 to $1,000.
Those extra employer costs are being passed back on to consumers. Global clothing brand Next has attributed planned price increases for 2022 in part to rising wage costs.
climate impact
Extreme weather in many parts of the world has contributed to inflation.
Global oil supplies were affected by Hurricanes Ida and Nicholas, which tore through the Gulf of Mexico and damaged US oil infrastructure.
Add to that problems meeting demand for microchips, which worsened after a fierce winter storm closed major factories in Texas last year.
The cost of coffee also soared after Brazil, the world’s largest producer, suffered a poor harvest following its most severe drought in nearly a century.
trade barriers
More expensive imports are also contributing to higher prices. New post-Brexit trade rules are estimated to have reduced EU imports to the UK by around a quarter in the first half of 2021.
Moreover, US import tariffs on Chinese goods have been passed on almost entirely to US customers in the form of higher prices.
Chinese telecoms giant Huawei said last year that sanctions imposed on the company by the US in 2019 were hurting US suppliers and global customers.
The end of pandemic support
Governments around the world are withdrawing support given to businesses to help with the impact of the coronavirus.
Government spending and borrowing increased around the world during the pandemic. This led to tax increases that have contributed to the rising cost of living, while most people’s wages remain unchanged.
Also, many developed economies have had policies designed to protect workers, such as furloughs and welfare policies to protect the lowest paid.
Some economists suggest that these policies could also boost inflation as support initiatives come to an end.
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Kingston is an accomplished author and journalist, known for his in-depth and engaging writing on sports. He currently works as a writer at 247 News Agency, where he has established himself as a respected voice in the sports industry.
