Inflation round-up

As expected, the number of countries with double-digit inflation has continued to fall in the last two months. Our table below had a net loss of 12 countries, following the 14 which brought their inflation down to single figures last time. Even more notable is the trend column, with the vast majority of those remaining on the list now showing 'steady' or 'falling' trends.

With inflation in the United States having fallen to 3.0% in June and China flirting with deflation, these huge, influential economies will be exporting disinflationary forces elsewhere. Europe's inflation is also coming down, albeit more slowly.

The table's shrinking seems likely to continue, therefore. However, a few looming issues could slow that progress. Food costs, for instance, look set to rise. China's wheat and other grain farmers are reportedly facing a disastrous harvest following excessive rains. Extreme weather is predicted to diminish Ukraine's winter-grain yield by 20%, meaning a big upward impact on prices which could be compounded if Russia pulls out of the vital Black Sea grain distribution deal. There are also expectations of poor harvests ahead across the world because of El Niño - Australia's wheat and barley output may fall by a third next year due to the impact El Niño can have on weather systems.

Fuel costs too look set to rise in many parts of the world, but especially so in Turkey and Nigeria, both of which have tripled petrol prices recently.

In other inflation news, Kuwait, which was supposed to implement 5% VAT in 2018 along with other Gulf states, now looks unlikely to do so until 2026 at the earliest.