(Financial World) A new round of global inflation is coming, with serious consequences?

　　China News Service, Beijing, March 16 (Reporter Li Xiaoyu) With the gradual recovery of the world economy, the prices of commodities such as metals, grains, and shipping industries are rising.

A new round of global inflation is coming.

　　At present, the price of crude oil has risen to nearly US$70 per barrel, and shipping prices have also skyrocketed due to the shortage of containers.

According to foreign media reports, the current average cost of a container is about US$6,000, a five-fold increase compared to six months ago.

Due to the popularity of the "home economy", the prices of important components such as LCD panels and memory chips for notebook computers and televisions have also risen.

　　Food prices are also "steadyly high."

Due to insufficient supply, the average wholesale price of eggs in the Tokyo market has increased by about 50% from the beginning of this year.

As a large number of restaurants resumed operations, the price of chicken drumsticks in the United States also rose.

Soybeans have become "golden beans." The May soybean contract on the Chicago Board of Trade is close to 14.2 US dollars per bushel.

　　Analysts here believe that this round of inflation expectations is related to the recovery of the global economy after the epidemic and a series of large-scale relief policies.

　　The economy of many countries has picked up significantly recently.

In its latest forecast, the Organization for Economic Cooperation and Development (OECD) raised its forecast for world economic growth in 2021 to 5.6%, which is 1.4 percentage points higher than its forecast in December last year.

　　Ding Anhua, chief economist of China Merchants Bank, said that with the widespread promotion of vaccination and the stabilization of the number of newly confirmed cases, the accelerated recovery of global economic activities has pushed up prices.

In addition, the United States launched a US$1.9 trillion economic stimulus package, which has further strengthened inflation expectations.

　　Since March last year, the United States has introduced a total of about 6 trillion US dollars of financial relief measures, far exceeding the scale of economic relief during the 2008 financial crisis.

Former US Treasury Secretary Summers pointed out that such a large-scale stimulus policy may trigger "inflationary pressures that have never been seen in a generation."

　　In the view of Wu Ge, chief economist of Changjiang Securities, the current inflation expectations are heating up, the recovery of the world economy and the increase in stimulus policies of major economies are certainly important reasons, but the relatively slow recovery on the supply side has led to the imbalance of supply and demand.

　　He said that the epidemic in Europe and the United States, which are major consumer countries in the world, is now under control, and demand has begun to pick up significantly. However, the epidemic in raw material suppliers such as Brazil and Chile is still severe, and the production and transportation of a number of important raw materials such as copper and iron are restricted.

The "time difference" between epidemic prevention and control and economic recovery in different countries has resulted in an imbalance between supply and demand, which has boosted prices.

　　Wu Ge said that the improvement of the epidemic situation will further increase global demand, but the shortcomings of supply will still be difficult to fully compensate in the short term, and the supply of raw materials will not be able to return to normal immediately.

Under this circumstance, the situation where demand picks up faster than supply may continue, and inflation will continue for some time.

　　However, the new wave of inflation does not seem to cause a second blow to the world economy that has just improved.

　　Some analysts believe that although the current inflation levels in the United States, Europe and Japan are picking up, they are all at relatively low levels in history and are within the policy targets set by central banks. Therefore, there is no need to worry about inflation.

　　Ding Anhua said that the current inflation mainly belongs to the moderate re-inflation brought about by the economic recovery, rather than the persistent high inflation, let alone the “stagflation” with serious consequences.

The gradual recovery of supply and demand will gradually return the economy to normal levels, and it is unlikely that inflation will continue to increase.

However, considering that many countries have already built up high debts and financial markets are in an extremely fragile and sensitive position, we need to be vigilant against inflation.

(Finish)