Commodities Prices & Global Inflation Chaos

Global commodity prices have surged by 50%, marking the fastest pace in 27 years — a sharp rise that began after Russia’s invasion of Ukraine.

Key Reasons for Price Increases:

• War and sanctions on Russia disrupted global fuel supply.

• Widening COVID lockdowns in China triggered another supply crisis.

• Labor shortages worsened the supply–demand imbalance.

• Booming demand in recovering economies after the pandemic.

Higher commodity prices, especially crude oil, are fueling inflation. As food and other consumable prices rise, economic growth slows.

YTD % Change in Inflation:

• UK: 64%

• Australia: 46%

• EU: 45%

• Turkey: 44%

• India: 30%

• New Zealand: 17%

• US: 11%

• Bangladesh: 6%

• Pakistan: 3%

• Malaysia: 1%

Impact on Energy-Importing Economies:

Rising energy prices are hitting emerging markets hard — worsening trade, fiscal, and external balances, and slowing growth. Oil-exporting nations, however, are benefiting.

YTD % Change in Current Account of Oil-Importing Countries:

• Kyrgyzstan

• India

• Bangladesh

• Philippines

• Netherlands

• Taiwan

• Singapore

(Scale: -1.5% | -1% | -0.5% | 0%)

Global Response:

Central banks worldwide are stepping in to control inflation through interest rate hikes and withdrawal of excess liquidity from the system.