15 December 2024
How high should inflation be?
There is some debate about it - but most economist agree 0-5% is the ideal range.
In the 1970s, the oil embargo and instability in the Middle East caused oil and energy prices to rise, raising inflation.
Inflation cooled in the 1980s; an exception was South America, which suffered under high debts and poor government policies.
Forward in time to 2020 - COVID locked down the world.
Coming out of lockdown, consumers rushed to the shopping malls and governments spent heavily to boost economies. Add supply chain disruptions to the mix, and we had higher inflation.
This has started to cool off in 2023.
Source inflation rates: data.worldbank.org