Charting the Global Economy: Inflation Drumbeat Remains Steady

(Bloomberg) -- Price pressures continue to build in developed countries and emerging markets that include those in Latin America, where there are limits to what central bank rate hikes can achieve.

In the U.S., economists are adjusting their inflation forecasts higher and trimming consumer spending and growth projections. A similar trend is playing out in the U.K. as supply chain disruptions hinder factory output.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:

World

Natural gas prices are undergoing a historic surge, and it’s bad news for everyone from ceramic makers in China to customers of patisseries in Paris. 

Port congestion is worsening during one of the calendar year’s two peak seasons for global shipping demand.

U.S.

The rapid spread of the Covid-19 delta variant, higher inflation and persistent supply challenges are prompting economists to downgrade U.S. growth prospects for the remainder of the year. At the same time, economists raised estimates for the closely followed consumer price index for each quarter through the middle of 2022.

Job openings rose to a fresh record high in July, illustrating the lingering staffing shortages that are making it challenging for businesses to meet demand. After shedding millions of workers from payrolls last year, the rapid snapback in economic activity has left many businesses severely short-staffed.

Europe

The U.K. economy barely grew in July, suggesting the recovery from the coronavirus recession is rapidly leveling off as consumer spending weakens and supply disruptions hamper production.

The European Central Bank’s new staff forecasts showed a stronger near-term outlook for prices and growth in the euro area, though still insufficient to fulfill its mandate. Inflation will average only 1.5% in 2023, below its 2% target.

Europe is heading for a bruising battle over austerity as governments set out their positions on how to address huge debt loads and help their economies work past the deep Covid-19 recession.

Asia

Despite the disruption of the pandemic and political protests of recent years, Hong Kong’s economic growth is expected to catch up with rival financial hub Singapore’s this year for the first time since 2008. 

Emerging Markets

When it comes to raising interest rates to cool off pandemic inflation, Latin America’s central banks have been near the front of the global pack. They’re also among the worst-equipped for that task. 

Russia’s international reserves jumped to a record $618 billion, boosted by a $17.5 billion inflow from the International Monetary Fund’s global issue of its reserve currency. Amid Western sanctions, President Vladimir Putin has made boosting savings a major priority, controlling spending and salting away revenue from oil exports.  

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