Why is inflation hitting majority of the countries worldwide seemingly at the same time?
In: 4
1. Two years worth of pent up demand and household savings from the pandemic being spent as the world reopens. More demand for goods and services leads to higher prices, ie inflation.
2. Supply chain issues from the pandemic shutdowns in certain industries as well as the war in Ukraine driving up energy and other commodity prices significantly. Less supply of goods leads to people paying higher prices to secure those goods.
High demand + short supply = inflation.
It’s not all the same goods, but overall this is very simple way to look at both sides. Energy prices are a key driver of many (headline) inflation measures, and oil and gas prices have moved significantly higher.
Food is also an area that has become more expensive due to supply issues depending on item and where in the world you are.
Services another area with price increases – people spending money that wasn’t spent when they were locked down, ie travel.
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