High Inflation in All Countries

Apollo Chief Economist

Using the global BIS database, there are currently zero countries in the world with inflation below 2%, see chart below.

This fact raises the question whether US inflation is really something special driven by stimulus checks, higher unemployment benefits, and PPP loans.

Maybe the simple explanation is that inflation in the US is not driven by fiscal policy or even monetary policy, as our economics textbooks would say.

Instead, inflation went up literally everywhere in the world because of supply problems in the goods sector and in the energy sector. If this is the case, then inflation will soon come down once the supply chain problems in the goods and energy sectors have been resolved.

The bottom line is that with falling commodity prices and falling costs of transporting goods by container, truck, train, and air, we could see a sharp decline in inflation over the coming months. At least, the global nature of inflation seen in the chart below suggests that there is really nothing special about US inflation.

Chart showing the percentage of countries with inflation below 2% has plummeted
Source: BIS, Haver Analytics, Apollo Chief Economist. Note: Data till May 2022 (46 countries reported). The dataset includes the following 60 countries Euro Area, United States, United Kingdom, Austria, Belgium, Denmark, France, Germany, Italy, Luxembourg, Netherlands, Norway, Sweden, Switzerland, Canada, Japan, Finland, Greece, Iceland, Ireland, Malta, Portugal, Spain, Turkey, Australia, New Zealand, South Africa, Argentina, Brazil, Chile, Mexico, Peru, Cyprus, Israel, Saudi Arabia, United Arab Emirates, Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Thailand, Algeria, Bulgaria, Russia, China, Czech Republic, Slovakia, Estonia, Latvia, Serbia, Hungary, Lithuania, Croatia, Slovenia, Macedonia, Poland, and Romania.

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