2021 will be a world reference for the historical highs in inflation, according to the deputy director of economic analysis at Monex, Janneth Quiroz Zamora.
Until now, 31 countries are the ones that have already reported the annual variation of general prices for the entire year, including Mexico, which has the seventh highest inflation with a record of 7.4 percent.
The leaders of inflation in 2021 were emerging. But the advanced economies also felt inflationary pressures such as the United States, which completed a 7% variation in its general prices, a level not seen in 40 years.
The Monex expert explains that last year, global inflation was caused by the same factors: supply shocks due to the reopening of economies and bottlenecks in supply chains due to the heterogeneous global recovery.
In the case of some emerging economies, such as Mexico, there has also been a contamination of prices that is perceptible in the persistence of rising underlying inflation and in producer prices, the economist of the Saver think lab, Luis Pérez, noted separately. Lezama.
Among the 31 economies reviewed, in 2021 the leader of world inflation was again Venezuela, with an annual variation of 1,198%.
It was followed by Argentina, Turkey and Brazil, which presented double-digit fluctuations with annual inflation of 50.9%; 36.1% and 10.1%, respectively.
Then there are Poland, which registered a variation in its prices of 8.6% per year; Russia with 8.4% and Mexico, with 7.4 percent.
On top of Mexico’s price spike, in close proximity unprecedented in nearly three decades, is US inflation.
Controversy over the term “transitory”
The eight economies mentioned, the leaders of inflation in 2021, have general price levels that are far from those reached in 2020, the year of the outbreak of the pandemic and are also a long way from their normal trend and from their target levels. That is why since November its central banks began to abandon the definition of “transient inflation”.
The Monex expert considered that the central banks were seeking that there be no direct transfer to other prices or that it be ordered through reducing demand so that prices do not continue to increase in the rest of the economies.
Pressure also in the first semester
The president of the Federal Reserve (Fed), Jerome Powell, who for most of last year defended the idea that inflation would be transitory, acknowledged this week before the Banking Committee of the United States Senate that inflationary pressures will persist until half of the year.
The director of Consulting and Products for the Americas at the private bank Julius Baer, Esteban Polidura, estimates that during the first quarter of this year global pressures on inflation will begin to decrease, that is, energy costs and commodity prices. .
He considers that towards the end of the second quarter, “the depressurization” of inflation (external pressure on prices) will be perceptible in Mexico.
Even Japan was shocked
Among the 31 countries that have reported inflation for 2021 so far, those with the lowest records are Japan, with 0.6% per year; Saudi Arabia, which showed an annual fluctuation of 1.1%, as well as Switzerland and China, which coincided with variations of 1.5% in their general prices.
It is necessary to review case by case, observed Quiroz Zamora. Japan has been dealing with deflation for years and during 2021, which became the year of the greatest global pressure on prices, it reported a first positive record of 0.6 percent.
It is a low variation when compared to the world in the atypical year, but it shows a change in the particular situation of the Asian country.