[Economics] Generalized rise in prices leaves the world economy trapped in a perfect storm

[#Wittels-]

From meat in Tokyo to chicken fillets in London, consumers are beginning to feel the impact of rising costs on the global economy.

The rebound in economic activity following the restrictions imposed by the coronavirus exposed shortages throughout the supply chain. Companies are not finding workers, boats or fuel, which threatens an incipient recovery.

Britain's largest poultry producer warned that the country's 20 years of cheap food were coming to an end and that food price inflation could soar into double digits.

The world's fifth-largest economy faces a severe shortage of grocers, truckers and butchers, exacerbating global supply chain stresses.

"The days when you could feed a family of four a 3-pound (US $ 4) chicken are coming to an end," Ranjit Singh Boparan, owner of 2 Sisters Group, said in a statement.

Even in Japan, where weak growth means that the prices of many things, including wages, haven't risen much in decades, consumers and businesses face a price shock for staples like coffee and meat.

 

Japan's core consumer inflation only stopped falling in August, snapping a 12-month deflationary streak. Economists and policy makers expect to see recent price increases reflected in official data in the coming months.

In the United States, President Joe Biden on Wednesday urged the private sector to help ease supply chain blockages that threaten to disrupt America's holiday season.

Cold front
With winter approaching in some parts of the world, prospects look bleak as power supplies dwindle.

With cold weather in northern China, coal prices were hovering near record highs amid an energy crisis that is driving unprecedented inflation at factories in the world's second-largest economy.

China's growing energy crisis, caused by coal shortages, high fuel prices and a boom in industrial demand after the pandemic, has halted production at numerous factories, including many that supply major global brands such as Apple.

High energy prices pushed inflation in China's factories to its highest level in at least 25 years in September, although weak demand limited consumer inflation.

So far, there is little sign of an easing in energy costs, with oil prices rising Thursday after a larger-than-expected drop in stocks of gasoline and distillates in the United States.

The increase was also supported by expectations that as winter approaches, high natural gas prices will drive a switch to oil to meet heating demand.

The International Energy Agency (IEA) said the energy crisis is expected to boost oil demand by half a million barrels per day (bpd) and could fuel inflation and slow the global recovery from the pandemic.

In Germany, the country's leading economic institutes cut their joint forecast for 2021 growth in Europe's largest economy to 2.4% from 3.7% because of supply bottlenecks hampering production.

 

In response to the energy price crisis, the White House has been speaking with US oil and gas producers to help reduce rising fuel costs, two sources familiar with the matter told Reuters.

In the United States, the average retail cost of a gallon of gasoline is at a seven-year high, and fuel costs are expected to rise during the winter, according to the Department of Energy. Oil and gas production remains below the national peak reached in 2019.

Dutch digital mapping and navigation company TomTom warned that supply chain problems in the automotive sector could last into the first half of 2022 after it reported a larger-than-expected quarterly core loss.

Car production has been hit by a global semiconductor shortage, forcing automakers still recovering from coronavirus disruptions to halt production again.

 

Link: https://gestion.pe/economia/alza-generalizada-en-los-precios-deja-a-la-economia-mundial-atrapada-en-una-tormenta-perfecta-noticia/