Global Consumer Price Inflation
The Consumer Price Inflation is a macroeconomic inflation indicator that the government and central bank use to target inflation. Additionally, it is employed in the national accounts as a deflator and to check the stability of prices.
Global inflationary pressures have increased since Russia invaded Ukraine in Q2 2022. Supply chain and transportation problems, elevated volatility, and rising energy, food, and commodity costs are all contributing to the acceleration of the global price rise. Although the war will also dampen some inflationary pressures due to lower private sector confidence and spending, overall global inflation is forecast to accelerate in 2022-2023.
Consumer Price Inflation in the Americas in 2022
Argentina, Brazil, Chile, Colombia, the United States, Mexico, Peru, and Canada are the major economies in the Americas region. With a consumer price inflation of 55.1%, Argentina has the highest inflation in the Americas region. The average consumer price inflation for the selected countries was 7%, excluding Argentina.
After years of fluctuating around targets, inflation in the Latin American countries is at its highest level in 15 years due to the pandemic's effects and the war in Russia-Ukraine. Inflation in Brazil, Chile, Colombia, Mexico, and Peru grew significantly in 2021 than in other emerging markets and developed nations.
The surge in food and energy prices initially caused the inflation to rise, but it broadened as a result of wage indexation practices and monetary policy inertia (contracts that adjust their terms automatically with inflation), as well as a strong recovery in demand, initially for products but later for services as well. Another inflationary impact on the area is the war in Ukraine. According to the IMF, a 10 percent increase in oil prices would result in a 0.2 percent increase in inflation, whereas an increase in food costs by 10% would lead to a 0.9% rise in inflation. Due to current indexation and indications of a tight labor market in some nations, inflationary pressures that the war has increased may persist.
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