Inflation hits record high in Europe By Bloomberg

© Reuters. Charting the global economy: Inflation hits record high in Europe

(Bloomberg) – Record inflation in the euro zone is expected to fuel debate over European Central Bank tightening at next week’s policy meeting, where officials are expected to end asset purchases and set the stage for an interest rate hike next month.

In the United States, job growth remained solid in May and suggests that the economy is holding up as the Federal Reserve raises interest rates. Ukraine, Canada and Kenya were among the central banks that raised borrowing costs to fight soaring inflation.

Meanwhile, Chinese authorities are pursuing measures to shore up a faltering economy, and Brazil’s first-quarter economic growth proved disappointing.

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

Europe

Eurozone inflation accelerated to a record high. The gap between the highest and lowest inflation rates among the 19 members of the currency bloc also reached its highest level on record. The scale goes from Malta, where consumer prices rose 5.6% last month, to Estonia, where inflation hit 20.1%. That’s a difference of more than 14 percentage points, more than at any time since the dawn of the euro in 1999.

Italy has one of the lowest levels of work participation in Europe, which could prove to be one of the toughest challenges for the EU in its 200 billion euro effort to the Recovery Fund.

Membership of the euro is in fact a condition of joining the European Union, although the Czech Republic, Hungary, Poland and Sweden do not seem interested. Meanwhile, Denmark, which secured an opt-out from membership before the dawn of the currency, is not budging either.

WE

Employers hired at a solid pace in May as wage gains held up, suggesting the economy continues to grow as the Fed raises interest rates at a brisk pace to rein in runaway inflation.

High school students and their parents are increasingly questioning whether a traditional four-year college education is the right financial decision, with rising costs often resulting in crippling student loan debt.

World

Ukraine more than doubled its interest rate with a 1,500 basis point hike that takes the benchmark to 25%. The authorities are reactivating political tools to stem inflation and protect the currency battered by the Russian invasion. Canada, Kenya and Hungary were also among the central banks that raised rates this week.

Global food prices remained near a record high as Russia’s invasion of Ukraine disrupted trade, fueling hunger and deepening the cost of living crisis. Russia’s blockade of key Black Sea ports has exacerbated supply chain unrest, sending prices skyrocketing and prompting the United Nations to warn that food shortages could drive millions to migrate.

Asia

Chinese officials have pledged to pursue a series of government policies to boost growth following Premier Li Keqiang’s recent call to avoid a Covid-fueled economic contraction this quarter.

As the world emerges from the pandemic, economists warn of a troubling data point: Failing to restore jobs for women – who have been less likely than men to return to the workforce – could cost billions of dollars to global economic growth. The outlook is particularly bleak in developing countries like India.

Emerging Markets

With inflation at 58% and accelerating, Argentina’s $500 billion economy is an outlier, even in a world where prices are soaring almost everywhere. This isn’t just a pandemic-era problem: While historical statistics are suspect, Argentina hasn’t seen single-digit inflation for at least a decade.

The Venezuelan government is quietly rolling back a decades-long policy of subsidizing electricity, water, gas and road tolls to shore up fiscal accounts, shifting costs to businesses and individuals long accustomed to good public services. market.

Brazil’s economy grew below expectations in the first quarter in another setback for President Jair Bolsonaro as he prepares for his re-election bid.

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