Inflation is surging around the world in developed and emerging economies alike as countries grapple with supply chain issues and rising demand as the threat from the pandemic recedes. On top of this, oil and gas prices, which were already rising, went up further after the Russian invasion of Ukraine in February.
While the impact of inflation has been quite broad there are some items in the cost of living basket that have been particularly hit. The war in Ukraine has created a global shortage of crops including sunflowers used for oil. This, along with a palm oil shortage, has seen cooking oil prices increase massively in many cities around the world. Petrol prices are the main driver of inflation though with prices rising this survey in all but two of the 490 plus locations surveyed, Bamako, Mali and Nuuk, Greenland. Oil prices were already rising as supplies struggled to keep up with rising demand as economies recovered from the pandemic but the war in Ukraine has made the situation much worse.
Exchange rates have also seen significant changes in the survey period with the US dollar strengthening on the back of rising interest rates and the euro weakening over concerns over rising gas prices. Elsewhere some currencies like those in Nigeria, Angola and Iran have benefitted from rising commodity prices while many others have seen their currencies weaken in the face of rising fuel costs.
Use the interactive map below to find out more about how various factors affected indices in the countries where you have assignees. Simply choose a home location from the dropdown and learn more about how cost of living indices changed in the six months to March 2022. The exchange rate changes, inflation and index change indicator will vary depending on the home location selected and are based on ECA's default standard home-based index and may change if different assumptions are used.
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Inflation is continuing to rise across much of the world with the worst yet to come for many and it is beginning to look like growth is slowing too which will hit many more economies already hurting from the impact of the pandemic. We have already seen a devalued currency and dramatic political upheaval in Sri Lanka as a result of rising inflation and others may follow. Zimbabwe and Sudan have devalued their currencies and Laos appears to be struggling with its debts too.
Meanwhile several currencies have rebounded strongly since the March 2022 survey including the Russian rouble which has recovered thanks to rising oil and gas prices helping the country access hard currency despite the sanctions. Angola, Kyrgyzstan and Armenia are among the countries to have seen the strongest currencies since the survey.
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ECA's interim surveys
We are currently undertaking interim surveys for the following countries due to high inflation expectations: Argentina, Ethiopia, Georgia, Iran, Lebanon, Myanmar, Nigeria, Russia, Sri Lanka, Sudan, Surinam, Turkey, Ukraine, Venezuela and Zimbabwe. The results will be available in July 2022.
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If you would like any additional information or data on the locations included in the survey, or advice regarding currency fluctuations, please get in touch.