News
gla_wpadmin  

Inflation continues to rise despite the end of the Ukraine war

Economic growth and prices are the arms of a scale. If the interest rate, which plays a pivotal role, is lowered, the economy is highly likely to revive, but inflation will rise. Conversely, raising interest rates can stabilize inflation, but economic growth is highly likely to slow. Of course, there is also stagflation, where prices rise at the same time during an economic downturn, but basically, under this logic, financial authorities adjust interest rates and formulate price policies.

As concerns about inflation are growing around the world, how long the steep inflation will last has become a topic of great concern. Some predict that inflation has reached its peak, but so far, the prevailing analysis is that inflation is still ongoing and will continue for the time being. It is in this context that the US Federal Reserve and the Bank of Korea (BOK) have made inflation stability their top priority by raising interest rates despite the recent decline in economic growth forecasts.

Heo Zhang, executive director of the International Monetary Fund (IMF), said that the recent inflation is a “structural problem” and that “we have to wait and see how it goes in the future because China is still under lockdown and the unexpected situation in Ukraine has occurred.” He added, “The international community’s sanctions against Russia are likely not to go away immediately after the war is over, and this will affect energy and grain prices for a considerable period of time.” It is highly likely that the high inflation situation, which has worsened since the Ukraine crisis, will continue for a long time worldwide.

Reference-www.mk.co.kr

Leave A Comment