Inflation: 5 reasons why global prices rose

Inflation in 2021 reached the highest levels in recent years globally. Only in Peru was 6.43%, the highest in 13 years. Below is a summary of the main factors that influenced the rise in prices in the last year.

1 | Energy and gasoline prices

At the start of the pandemic, oil prices plummeted, but demand has soared since then, hitting a seven-year high this week. Gas prices also rose sharply, driven by demand in Asia and Europe.

2 | Shortage of goods

Manufacturers in places like Asia, many of which faced closures due to COVID-19 restrictions, have struggled to keep up with demand.

This situation has caused a lack of materials such as plastic, concrete and steel, which generated price increases.

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3 | 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.

4 | climate impact

World oil supplies were hit by Hurricanes Ida and Nicholas, which tore through the Gulf of Mexico and damaged US oil infrastructure.

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Added to this are problems meeting demand for microchips, which worsened after a fierce winter storm shut down major factories in Texas.

5 | trade barriers

More expensive imports are also contributing to higher prices. It is estimated that the new commercial rules after the Brexit cut EU imports to the UK by a quarter in the first half of 2021.

On the other hand, import tariffs USA on Chinese products have been transferred almost entirely to customers in the North American country in the form of higher prices.

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inflation in rich countries

Inflation in the group of developed OECD countries reached 5.8% as of November 2021. The figure is the highest recorded since May 1996. The increase was driven by energy prices, which rose by 28%, more than three percentage points from the previous month and the highest rate since June 1980.