Lessons of History on Flood Impact on China’s CPI

(Bloomberg) -- The devastating floods in the Chinese city of Zhengzhou is raising concerns about a potential spike in inflation. While there may be some upward pressure, any impact would be mild and unlikely to last beyond near term, writes Bloomberg Economics’ economist Eric Zhu. Historical evidence also shows the impact of flooding on food or pork price inflation tends to be transitory and limited. Of the three big floods in the summers of 2016, 2017 and 2020 -- which affected more regions and lasted longer than this time, thus far -- none has caused visible shifts in food price trends beyond short-term volatility, according to Zhu.

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