The 2021–2022 inflation surge is the higher-than-average economic

inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...

throughout much of the world that began in early 2021. It has been attributed to the 2021 global supply chain crisis caused by the

COVID-19 pandemic The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identified ...

, and unexpected demands for certain goods. As a result, many countries have seen their highest rates of inflation in decades.

Background and causes

While there is no unanimous agreement by economists as to the exact cause of the inflation surge, there are several theories. Most attribute it to product shortages resulting from global supply-chain problems, largely caused by the COVID-19 pandemic. Other causes cited include strong consumer demand; turmoil in the labor market; and the fact that 2021 prices are being compared to 2020 prices, which were depressed due to pandemic-related shutdowns. Additionally, many economists cite the unprecedented level of spending from the passage of COVID-19 relief programs by the

Biden Administration Joe Biden's tenure as the List of presidents of the United States, 46th president of the United States began with Inauguration of Joe Biden, his inauguration on January 20, 2021. Biden, a Democratic Party (United States), Democrat from Delaw ...

as a key factor for the inflation surge.

Impact on individual countries

While most countries saw a rise in their annual inflation rate during 2021, some of the highest rates of increase have been in

Brazil Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...

Turkey Turkey ( tr, Türkiye ), officially the Republic of Türkiye ( tr, Türkiye Cumhuriyeti, links=no ), is a list of transcontinental countries, transcontinental country located mainly on the Anatolia, Anatolian Peninsula in Western Asia, with ...

, the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., federal district, five ma ...

, and

New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 List of islands of New Zealand, smaller islands. It is the ...

. In the US, the Consumer Price Index rose 6.8% between November 2020 and November 2021, spurred by price increases for gasoline, food, and housing. That was the highest US inflation rate since 1982. Inflation is believed to have played a major role in the results of

off-year elections An off-year election is a general election in the United States that is held when neither a presidential election nor a midterm election takes place. Almost all "off-year" elections are held on odd-numbered years. At times, the term "off-yea ...

. It is also believed to have played a major role in a decline in the approval rating of President Joe Biden (who took office in January 2021). Many

Republicans Republican can refer to: Political ideology * An advocate of a republic, a type of government that is not a monarchy or dictatorship, and is usually associated with the rule of law. ** Republicanism, the ideology in support of republics or agains ...

have blamed the actions of Biden and fellow Democrats for causing or fueling the surge. Canada also saw the highest inflation rate since 1991, with prices of food rising by 6.5%. In

, retail prices rose 9.65% in December compared to November, for an annual rate of 34%. Some of the largest increases were for electricity, natural gas, and gasoline. The economy was further strained by a currency crisis caused by a series of rate cuts by the central bank; the Turkish lira lost 44% of its value against the dollar during 2021. In Brazil, inflation hit its highest rate since 2003—prices rose 10.74% in November 2021 compared to November 2020. Economists predicted that inflation has peaked and that in fact the economy may be headed for recession, in part due to aggressive interest rate increases by the central bank. In the Netherlands, the average 2021 inflation rate was the highest since 2003. The inflation rate in November was the highest in nearly 40 years. With energy prices having increased by 75%, December saw the highest inflation rate in decades.

References

{{DEFAULTSORT:2021-2022 inflation surge Inflation Economy of the United States Economic impact of the COVID-19 pandemic 2021 in economics 2022 in economics

Background and causes

Impact on individual countries

See also

References