En todo el mundo, hasta los dulces están por las nubes

En todo el mundo, hasta los dulces están por las nubes

It is not his perception that every time he goes to the market he does not have enough money or ends up spending much more and that the same thing happens if he goes to fuel his car, buy clothes, or practically any other expense.

The truth is that the cost of living is skyrocketing and more and more reasons explain it. The worst thing is that it is not just a matter of Colombia, in almost the whole world there is a generalized inflation that worries the monetary authorities of the entire planet.

And it is very serious that every time citizens can buy fewer things with the money they earn, or that they have to lower the quality of what they consume.

Since last year, international experts and marketers have been explaining that after the pandemic, the logistics supply chains were unable to recover at the speed that demand did, that is, that people wanted to buy more products than they could move in cargo ships.

Images of the main ports full of containers and with rows of ships waiting to unload went around the world. This phenomenon was known worldwide as the “container crisis” and was increased by the emergency in the Suez Canal as a result of a ship running aground in March 2021. All this is an issue that a year later is still far from being resolved.

The container crisis meant that many products did not arrive at warehouses on time, and created a major bottleneck in industries that were hungry for raw materials to fulfill their orders, but these did not arrive; This is how, for example, the number of microchips needed by the automotive, technology and appliance industries, among others, could not be manufactured. The only option for manufacturers and traders was to increase the price.

And to top it all off, because consumers were still so keen to buy, even though there weren’t enough in stock, prices skyrocketed even higher.

In this scenario of high demand, the prices of what is known in the world as raw Materials: oil, coffee, sugar, gold, corn, soybeans, wheat, among others. So their food, that of cattle, chickens and hens became more expensive, hence meat and eggs became more expensive, in short, again the price of their food had a growth spurt.

In this coming and going of reasons, 2021 ended, but this year the conflict between Russia and Ukraine accelerated the increase in prices much more, since both nations are very important producers of crude oil, gas, fertilizers, palladium, in short, countless essential elements for world production.

For example, Brent oil has been quoted very close to 130 dollars per barrel, when before the Russian invasion it was at 90 dollars. And behind the new oil prices will come the increase in gasoline.

Felipe Bayón, president of Ecopetrol, told EL COLOMBIANO that although a high price of Brent benefits the company’s accounts, and those of the Government on account of oil revenues, Colombians may suffer even more with inflation, because the Fuel Price Stabilization Fund will no longer be able to subsidize the increase in the price of gasoline. According to his calculations, the maximum acceptable value is 90 dollars per barrel, without affecting the citizens’ economy and generating good resources for the Nation.

This Tuesday, the Dane will publish the Consumer Price Index for March, and there the consequences of a war on the other side of the world can be seen more clearly. It should be remembered that inflation in February was 8.1% in its annual data and in the accumulated figure for 2022 it was already 3.33%. The average goal of Banco de la República is 3%, and according to the Issuer’s manager, Leonardo Villar, all necessary efforts will be made to channel it towards that goal.

everything is expensive in the world

This Friday the European Central Bank revealed that inflation in the eurozone stood at 7.5% in March, the highest indicator since the creation of the European Union. This data is very serious for the economy of the old continent, if one takes into account that the target range of the Central Bank was between 5% and 5.5% for the year.

The president of the entity, Christine Lagarde, highlighted that, since June, energy and food explain “around two thirds of inflation” in the euro zone. And he sees, in particular, three factors that will continue to push inflation up and the first is precisely energy, whose prices “are expected to be higher for longer”, with gas 52% more expensive and oil 64% more expensive. % since the beginning of the year.

The second factor is the “pressure” on food prices, since Russia and Ukraine together account for 30% of global wheat exports, according to Lagarde, for whom the third explanation is that supply problems will persist in some sectors. .

The United States, for its part, is also in crisis due to the rise in prices, the annual variation to February stood at 7.9%, and it is expected that the figure that will be revealed in the coming days corresponding to March is still highest.

And in regions like the Middle East and North Africa there is already talk of famine. According to data from the World Food Program, the price of a basic basket increased by 351% in Lebanon, followed by Syria (97%) and Yemen (81%) due to their dependence on imports, the depreciation of their currencies and the harsh Syrian drought.

Some urgent measures

At the moment, the president of the United States, Joe Biden, has embarked on an ambitious project to release oil reserves, which will inject a million barrels a day into the market for six months to lower the price of crude oil, thus guaranteeing the supply of fuel in his country. country and lowering the global pressure exerted by Russia.

This Friday, in Spain, a discount plan for gasoline consumption began, to mitigate the effects that carriers have due to oil prices. This is a discount of 20 euro cents per liter of gasoline and diesel, of which 15 are provided by the State and five by the big oil companies.

For its part, the Government of the United Kingdom has facilitated a reduction in energy bills for some sectors and also cuts in the municipal tax, the cost of which varies according to different neighbourhoods.

In Colombia, on the other hand, the measures to curb inflation are monetary policy. The Board of Directors of Banco de la República decided on Thursday to raise the interest rate by 100 basis points, raising it to 5%. This indicator has risen gradually since last September when it was at 1.75%.

The Issuer’s idea is that, with the rise in the reference indicator, the country’s banks will be forced to charge more for their credits and this will discourage demand, but it is not very clear what the real effect will be given that inflation is presenting by external shocks, and despite the increase in rates, which already adds up to six months, the cost of living continues through the roof.

For this reason, President Iván Duque did not like the measure, since he considered it a potential threat to economic growth. The president had also disagreed in February when the Issuer had raised rates another 100 basis points, arguing that inflation was due to external factors far beyond the Issuer’s control.

And the fact is that the president is right about this, when credit is discouraged, demand falls and the productive apparatus suffers; but as analysts consulted by this newspaper explain, inflation is the most damaging tax against the vulnerable population that spends a large part of their income on food. The more inflation there will be the more hunger. This is how monetary policy will continue to teeter on the tightrope, since analysts already predict that at the end of the year the interest rate will be at 7.5%