"The highest level in 40 years in the United States"


"The surge of 78% in Turkey" ...


In the world market, news about record price increases runs through the headlines on a daily basis.

Moreover, there are a number of cases where the level accelerates sharply beyond the expectations of the market, and market participants are saying that it is a series of inflationary surprises.

What exactly does that mean?

(Keiichiro Furuichi, Reporter, Ministry of Economic Affairs)

Unpredictable in a row of surprises

"We, the economists, have lost their predictions about the outlook for prices. If we continue to remove them, we may run out of work."



Self-deprecatingly says one economist who analyzes and forecasts economic data.



Economists are demonstrating whether or not they can accurately predict the future even as the economic environment changes drastically, but it seems that economic professionals are also struggling with the rapid global inflation.



Is the economist's prediction really wrong in the first place?



We compared the median market forecasts with the recently announced inflation rates in Europe, the United States and Asia.

Then, it turned out that there were a series of cases where the actual results exceeded expectations.

Why remove it?

There are three reasons

Why is the expectation so wrong?

When I asked multiple economists, I found three reasons.



First, the preconditions of the world economy have changed significantly during the recovery process from the Korona-ka.

For example, in the United States, while demand for goods and services has expanded, the supply side has been unable to meet that demand due to labor shortages, and the power to push up prices has increased at a stretch.

It is still unclear how long this situation will last.



The second is the impact of Russia's invasion of Ukraine.



It has caused soaring global energy and food prices.

This is also a situation where the future is completely uncertain.

And finally, few economists have experienced such a global inflation phase in the first place.



When economists make economic forecasts, calculation models based on data on economic conditions and market movements after 2000 are often used, and it is not easy to make trial calculations based on data before this. that's right.

Inflation is in a new phase as concerns about economic slowdown increase

Record inflation has been a headache for professional economists.

However, some people have come here to point out changes in the economic tide.



Economic statistics have been released one after another, suggesting a slowdown in the "strong pent-up demand" (consumption and demand that had been suppressed by the Korona-ka), which had been the basis of inflation. ..



June's PMI (Purchaser Confidence Index), which shows consumer sentiment in the euro area announced on June 23, was well below market expectations, and FRB Chair Powell takes pride in the economic situation as "strong." In the United States as well, the June consumer confidence index remained lower than market expectations.



On July 5, the euro plunged against the dollar against the backdrop of a harsh view of the outlook for the eurozone economy.

Since December 2002, the price has dropped to the level of about 19 and a half years.



In the market, there is a rapid growing concern that the Western economy may enter a phase of slowdown and even recession.



In that case, is there a movement to converge on inflation, or is there a risk of falling into "stagflation" where inflation and recession proceed at the same time as prices continue to rise?



In either scenario, the uncertainty of economic conditions will increase and it is unlikely that the "inflationary surprise" will disappear for the foreseeable future.

Scheduled to pay attention

Attention is the US consumer price index released on the 13th.

Economic statistics showing the state of inflation in the United States have exceeded market expectations and have continued to rise sharply from the previous month.



Many market participants expect further price increases this time, but if the rise is braked, the economic slowdown may become more conscious and the movement to avoid risks may increase.



In addition, China's April-June GDP has been announced, and the market is expected to experience a major decline.

The focus is on the extent to which the effects of temporary strict outing restrictions will appear.