Food a major concern in the global inflation crisis


photo. Pixabay According to data published on Tuesday, food prices rose in 33 out of 38 member states. On an annualized basis, the increase was particularly pronounced in Turkey (99%), Hungary (42.9%), the three Baltic republics Lithuania (33.7%), Latvia (29.5%) and Estonia ( 28 percent), and in Colombia (27 percent). Across the euro area, the decline in the value of money was slightly more moderate (15.5%). As a consequence of the increase in food prices, in October the total inflation in the OECD countries increased to 10.7%, ie it was 0.2% higher than in October. greater than in September. In October, 18 member states recorded double-digit inflation y/y. Once again, Turkey was in the lead with a “stratospheric” result of 85.5 percent, followed by the three Baltic republics – strongly exposed to the economic consequences of the war in Ukraine – with indicators above 20 percent. Poland, with the result of 17.9 percent, was clearly above the average. Below are countries outside Europe (Japan, South Korea, Australia, Mexico and the United States), i.e. economies that are not so affected by the energy crisis caused by the war in Ukraine. France (6.2%), Luxembourg (6.9%) and Switzerland (3%) also recorded very good results. Growth in energy prices in OECD countries slowed down, amounting to 28.1% in October, ie recording a decrease of 0.7%. compared to September data. Excluding food and energy prices, annual OECD inflation was stable at 7.6% in October. In the G20 group, inflation y/y amounted to 9.5% in October. Outside the OECD, inflation increased y/y in Argentina, but fell in China, Brazil, India and Indonesia, while in Saudi Arabia and South Africa it remained broadly unchanged. The chief economist of the European Central Bank (ECB), Philip Lane, said in an interview with the Milano Finanza newspaper on Tuesday that it is still too early to judge whether inflation has peaked or will peak in early 2023. further interest rate hikes. In other words, we should be patient, because we will have to wait for a deeper and more permanent disinflation process. While there are signs of inflation peaking in some countries, food prices continue to rise sharply, driving up the cost of living and forcing central banks to keep interest rates high even as economies start to slow sharply.

Frugal holidays

According to Reuters, rising prices have started to limit consumption in Eastern Europe. Food sales in Hungary fell 5.6% in October, and families face annual price increases of more than 34%. in the case of meat and fish and by 80 percent. in the case of bread. A similar situation is taking place in the Czech Republic, where sugar prices have increased by 105%. In turn, in Poland flour costs 45.4 percent. more than last year. A survey conducted by Provident’s Barometer showed that Poles will spend an average of PLN 1,259 on Christmas this year, which is PLN 307 more than a year ago, despite the fact that almost half of the respondents declared that they would buy cheaper products to reduce the costs of preparing the Christmas Eve dinner. Prices in Eastern Europe are expected to start declining very slowly in the first half of next year, although according to Goldman Sachs, there are still no lasting signs of improving inflation dynamics in the region.

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