According to data published by the Department of Labor and Human Resources, inflation for the month of April stood at 6.1%, the highest figure in 14 years since October 2018. The rise is due to the increase in the price of gasoline (37.1%) and food, mainly oils (24.7%), meat, poultry, fish, eggs (11.2%) and cereals (8.5%).
Prices have been affected by the Russian invasion of Ukraine, which has caused oil and grain prices to rise and supply chain problems, aggravated by the increase in COVID-19 cases in China. This will likely worsen. Before the Russia-Ukraine conflict began, the two countries supplied a combined one-third of the world’s wheat exports and were in the top five exporters of corn. Coupled with widespread fertilizer shortages, supply chain issues, and record droughts, the world has about 10 weeks worth of wheat on hand, Sara Menker, CEO of Gro Intelligence, a global company that uses artificial intelligence and public and private data to predict food supply trends.
Inflation was at 4.7% in February, before the invasion. Inflation has recorded annual increases for 16 months but has been higher in the months of March and April. The rise in prices is expected to accelerate in May, as in the rest of the world’s economies.
The Consumer Price Index (CPI) rose 1.3% between March and April, the largest monthly increase since September 2017. Prices began to rise in March last year, mainly driven by energy prices.
2021 closed with an inflation of 2.4%, the highest since 2011 (2.9%), after having been negative (-0.5%) in 2020, the first time that annual inflation was in negative territory since 2016.
In the United States
In the United States, the CPI stood at 8.3% in April from a year ago, according to the Bureau of Labor Statistics (BLS). Inflation remains at its highest level in 40 years. The figure is two-tenths lower than the 8.5% for the month of March. When compared to the previous month, the IPC rose 0.3%.
In the United States, the Federal Reserve is in charge of controlling inflation by increasing interest rates, which have already raised them to between 0.75% and 1%. The agency contemplates two additional increases of half a percentage point in June and July. Rates could reach 2.7% in 2023. The risk is a recession next year or what is known as “stagflation”, a stagnation with inflation.
The price of gasoline continues to rise
The price of gasoline was on Saturday, May 28, at a maximum price of $1.29 per liter at the consumer level, according to data from the Department of Consumer Affairs (DACO). It is the highest price in recent weeks.
In April, according to data from the DACO monthly survey, the average price of gasoline was $1.05 a liter, 39.5% above the same price of last year and 2.1% below the $1.07 a liter in March.